Euro Strengthened After the ECB Prospects For a Rate Hike.
Oil Price Flat, Low Trading Volume Due to Thanksgiving.
Brent crude prices ended slightly lower, while US WTI held steady, hovering near a two-month low, as calls to complicate the G7 level on Russian oil prices raised doubts about how that would limit supply. A bigger-than-expected increase in US oil reserves and the spread of COVID-19 in China also increased pressure on crude oil prices. Brent crude oil futures fell 0.08% to $85.30 a barrel, while WTI was volatile as the US market was on holiday. Low trading volumes due to the Thanksgiving holiday in the US market. Both benchmarks fell more than 3% on Wednesday, on news that the proposed price cap for Russian oil could be higher than current market levels. China on Wednesday reported its highest number of daily COVID-19 cases since the pandemic began nearly three years ago and was tightening controls to slow the spread.
The US dollar continues to fall ahead of the FOMC minutes.
The US dollar extended losses on Thursday after minutes from the central bank’s November meeting supported views that the central bank will slow interest rates at its December meeting. Minutes 1-2 of the November meeting indicated that some officials were satisfied that they could now proceed in smaller steps, with a 50 basis point rate hike likely next month after four consecutive 75 basis point hikes. The dollar index fell 0.20% to 105.70 after falling 1.1% on Wednesday. The Fed raised interest rates to a level not seen since 2008, but colder-than-expected US consumer price data or CPI fueled expectations of a more moderate growth rate. Those expectations sent the dollar index down 5.2% in November, putting it on track for its worst monthly performance in almost 12 years.
The euro strengthened after the ECB minutes supported prospects for a rate hike.
The euro remained near its highest level since early July on expectations that the interest rate differential between the ECB and the Fed will narrow. The minutes from the ECB meeting showed that, even before the recession, policymakers remained committed to raising interest rates to curb inflation, while the FOMC minutes indicated that the Fed would soon start slowing the pace of rate hikes. Growth was also supported by PMI figures showing that the euro area trade contraction slowed slightly in November.