USD Rises Despite Trump’s Criticism, Crude Oil Gains Amid OPEC Mulling Extension - US Market Open

2019-03-04 14:00:00

MARKET DEVELOPMENT – USD Rises, Euro Offered Ahead of ECB, Crude Oil Gains

USD: Despite US President Trump once again criticising the Fed for raising rates and stating that the USD is too strong, the greenback is on the front-foot to begin the week with modest gains of 0.3%, edging above 96.50. As volatility remains low, investors continue to seek the yield advantage that the USD has, thus keeping the greenback supported relative to its major counterparts.

EUR: While newsflow has been on the lighter side, the Euro has softened throughout the European morning, which also comes ahead of this weeks ECB meeting. Much of the losses in the Euro has stemmed from selling against both USD and GBP.

AUD: Marginal gains for the Australian Dollar following weekend reports via WSJ, that US and China are nearing a potential trade agreement in which a sign off between Trump and Xi could take place on March 27th. However, with a trade deal largely priced in, focus turns towards the domestic data front, which has continued to ease off in Australia with the latest inventory and corporate profit figures posing further downside risks to this week’s GDP report. As a reminder, the RBA meeting is scheduled overnight, while a sizeable 3.4bln vanilla option at 0.7150 is due to roll-off at tomorrow’s NY 10am cut.

Crude oil: Oil prices are up over 1% today with the boost in risk sentiment underpinning, while Friday’s drop-in oil rigs has also helped ease fears over rapidly increasing shale production. On the positioning front, money managers increased their long positions in Brent yet again, in a sign that investors may be somewhat optimistic over the oil complex. Elsewhere, OPEC source reports have hinted that the cartel could agree an extension to the current oil output quotas for the rest of 2019 in June.