- Crude oil prices received upward support due to the Palestine-Israel conflict.
- The escalation of the Mid-East tension could involve Iran and Saudi Arabia.
- US oil giant Chevron is instructed to cease production at its Tamar natural gas field.
- The sentiment around rate hikes fades due to the dovish remarks made by Fed officials.
Western Texas Intermediate (WTI) oil price experienced its most significant increase in six months, reaching $86.01 per barrel on Monday. However, it has since pulled back to $84.70 at the time of writing on Tuesday. The recent surge could be attributed to the Middle East conflict.
The continued tension between Hamas and Israel is causing apprehensions about the destabilization of the Crude Oil supply, which could result in upward support for Crude oil prices. The escalation of this conflict has the potential to extend into additional geopolitical tensions in the Middle East and involve neighboring countries such as Iran and Saudi Arabia.
Moreover, the US oil giant Chevron is instructed by the Israeli government, to temporarily cease production at its Tamar natural gas field located just off the northern coast of Israel.
The US Dollar Index (DXY) extends its losses on the fifth successive day, trading around 106.00 at the time of writing. The US Dollar (USD) failed to register significant gains despite the robust US Nonfarm Payroll data released on Friday.
This lack of appreciation can be attributed to a decline in US Treasury yields on Monday, with the 10-year US Treasury bond yield standing at 4.64% as of the current press time.
Moreover, the remarks made by Federal Reserve (Fed) officials overnight prompted investors to downplay the probability of additional rate hikes, resulting in a further drop in US bond yields. Consequently, this development is perceived as eroding the strength of the Greenback.
Dallas Fed president Lori Logan suggested that there might be less necessity to raise the Fed funds rate, and Fed Vice Chair Philip Jefferson acknowledged the importance of the central bank proceeding cautiously with any additional increases in the policy rate.
The upcoming FOMC meeting minutes scheduled for Wednesday are expected to impact the likelihood regarding the Federal Reserve's next policy move, which could potentially influence demand for the Greenback.
Market participants await the US Core Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday, as these events hold a pivotal role in assessing inflationary trends and economic conditions within the United States.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends slide below 1.0700 on stronger USD, EU political angst
EUR/USD stays under bearish pressure and trades at its lowest level since early May below 1.0700. Unabated US Dollar demand amid risk aversion and looming EU political uncertainty exert downside pressure on the pair heading into the weekend.
GBP/USD slumps to multi-week lows below 1.2700
GBP/USD extends its decline on Friday and trades at its lowest level in nearly a month below 1.2700. In the absence of high-tier data releases, the US Dollar continues to benefit from souring market mood, forcing the pair to stretch lower in the second half of the day.
Gold clings to recovery gains at around $2,330
Following Thursday's pullback, Gold holds its ground on Friday and trades in positive territory near $2,330. The benchmark 10-year US Treasury bond yield edges lower toward 4.2%, helping XAU/USD push higher ahead of the weekend.
Monero price poised for a downward correction
Monero price has encountered resistance at a critical level. The technical outlook suggests a potential short-term correction as momentum indicators signal a bearish divergence.
Week ahead – RBA, SNB and BoE next to decide, CPI and PMI data also on tap
It will be another central-bank-heavy week with the RBA, SNB and BoE. Retail sales will be the highlight in the United States. Plenty of other data also on the way, including flash PMIs and UK CPI.