US Dollar Stays Under Pressure as Global Stock Markets Recover
World stock markets showed some signs of stability after their recent drop last week, sparked by fears about higher interest rates. Nevertheless, many investors are not convinced that the worst has ended, and the yield of US bonds has stuck at elevated levels ahead of data on consumer prices in the US, which will come out on Wednesday and may raise concerns about inflation.
The US dollar remains under pressure against major currencies. The euro is trading at $1.2300, rebounding from its last week’s low at $1.2206, although it remains below its 3-year high of $1.2538 recorded on January 25. The recent rapid strengthening of the single currency was due to the fact that the European Central Bank will reduce its incentives this year due to the strong recovery of the Eurozone economy.
Oil prices rise on positive forecasts of OPEC, published the day before. Brent crude oil rose by $0.39 (0.62%) to $62.98 a barrel. WTI crude oil increased by $0.32 (0.54%) to $59.61 per barrel. On Monday, the OPEC raised the estimate of the growth in world oil demand this year by 60 thousand barrels per day. Now it is expected that by the end of 2018, the demand for oil will increase by 1.59 million barrels per day to 98.6 million barrels per day.
Gold prices were supported by a weaker dollar and demand on the eve of the Chinese lunar new year. Prices should remain in the range ahead of inflation data in the US this week, as the consumer price index in the US could become a catalyst for gold growth.