WTI holds near daily low as Fed decision draws muted reaction
- WTI holds near its daily low after showing little reaction to the Federal Reserve’s rate increase.
- The Fed raises rates by 25 basis points, while the dot plot points to another hike this year.
- Saudi pipeline recovery hopes weigh on prices, although Middle East supply risks keep a geopolitical premium in place.
Texas Intermediate (WTI) Oil holds near its daily low on Wednesday, showing little immediate reaction to the Federal Reserve’s (Fed) monetary policy announcement. At the time of writing, WTI trades around $97.50 per barrel, down roughly 3.3% on the day.
The Fed raised the federal funds target range by 25 basis points to 3.75%-4.00% in a unanimous decision. The updated dot plot placed the median year-end rate at 4.1%, indicating that policymakers expect one more quarter-point increase this year.
Oil prices barely moved following the announcement as the rate hike was already priced in. Still, higher borrowing costs and a stronger US Dollar could weigh on economic activity and future energy demand.
Meanwhile, the market remains focused on Middle East supply risks, which continue to keep a sizeable geopolitical premium embedded in Oil prices. Shipping through the Strait of Hormuz remains heavily restricted, while security concerns around the Red Sea and the Bab el-Mandeb Strait add to the uncertainty.
Some positive news on the supply side helped drive Oil prices lower on Wednesday. Saudi Aramco is reportedly working to partially restore its East-West pipeline within days after last week’s drone attack. The route allows Saudi Oil exports to bypass the Strait of Hormuz.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.51% | 0.61% | 0.48% | 0.42% | 0.40% | 0.57% | 0.59% | |
| EUR | -0.51% | 0.10% | -0.04% | -0.07% | -0.12% | 0.07% | 0.10% | |
| GBP | -0.61% | -0.10% | -0.17% | -0.18% | -0.23% | -0.03% | -0.01% | |
| JPY | -0.48% | 0.04% | 0.17% | -0.02% | -0.05% | 0.15% | 0.15% | |
| CAD | -0.42% | 0.07% | 0.18% | 0.02% | -0.03% | 0.16% | 0.17% | |
| AUD | -0.40% | 0.12% | 0.23% | 0.05% | 0.03% | 0.20% | 0.17% | |
| NZD | -0.57% | -0.07% | 0.03% | -0.15% | -0.16% | -0.20% | 0.02% | |
| CHF | -0.59% | -0.10% | 0.00% | -0.15% | -0.17% | -0.17% | -0.02% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
