Economic News:
Early on Tuesday in European trading, the U.S. dollar made a slight decline, but sterling mostly maintained its overnight rise as market optimism climbed due to the U.K. retracted its misguided mini-budget that cut taxes and caused market turbulence.
The U.S. Dollar Index, which measures the value of the dollar relative to a basket of six other currencies, decreased 0.02 % to 112.05.
The USD/JPY pair dropped to 148.97, down 0.04 %.
The NZD/USD pair increased by 0.99 % to 0.5688 and the AUD/USD pair increased by 0.17 % to 0.6301.
While the GBP/USD pair fell by 0.09 % to 1.2192, the USD/CNY pair grew by 0.02 % to 7.1952.
The dollar retreated from recent highs, but Bank of America’s and other financial corporations’ excellent earnings helped boost risk sentiment after last week’s inflation data had raised concerns that central banks might eventually operate in an overly aggressive manner and push nations into recession.
The release of September industrial output figures in the United States will draw attention on Tuesday and provide insight into the severity of the nation’s economic slump.
The announcement that Jeremy Hunt, the U.K.’s new finance minister, has reversed nearly all of the tax cuts that Prime Minister Liz Truss had previously proposed helped to improve mood.
The Euro value increased by 0.3% to 0.9866, reaching these levels for the first time since October 6. Investor mood was lifted by the announcement that the European Commission will this week present a proposal to help the Eurozone combat rising gas prices.
According to a draft proposal, the EC is planning to propose a “dynamic” price limitation for natural gas in the European Union as well as required restrictions on how much traded prices may move in a single day.
Commodities News:
Tuesday saw an increase in oil prices, supported by a weaker currency and supply issues, but gains were restrained by the threat of declining fuel demand from China as long as it maintains its strict zero-COVID policy.
The price of Brent crude futures increased by 82 cents, or 0.9%, to $92.44 a barrel. The price of a barrel of West Texas Intermediate (WTI) crude increased by 86 cents, or 1.0%, to $86.32.
The U.S. dollar index, which compares the dollar to six important rivals, including sterling, fell to its lowest level since October 6. Oil becomes less expensive for customers using other currencies, increasing their likelihood to make purchases.
Investors have been observed expanding their long holdings in futures following the drastic production cut reached by OPEC+, the Organization of the Production Exporting Countries (OPEC) and its allies, including Russia, earlier this month.
After the White House claimed that Riyadh had forced certain other countries to support the change, OPEC+ member states began lining up to support the reduction in the output target.
Oil prices received some support from speculation that China may maintain its loose monetary policy in order to bolster its economy, which has been hampered by COVID-19 limitations. On Monday, the nation’s central bank renewed medium-term policy loans that were about to mature while leaving its benchmark interest rate steady for a second month.
On the supply side, U.S. crude oil inventories are projected to have climbed by 1.6 million barrels in the week to October 14 compared to the previous week, according to a preliminary Reuters poll released on Monday.
