- WTI's rebound from $85.30 stalls below $89.00.
- Crude prices' recovery loses strength with the US dollar surging.
- Bright US data dampen hopes of a Fed pivot in December.
The solid recovery in oil prices witnessed during Tuesday’s Asian And European sessions, has lost traction during the US session, weighed by a sudden USD rally. WTI futures have been capped at $89.40 after having bounced up from $85.30 lows on Monday.
The US dollar jumps on bright US data
A set of better-than-expected US macroeconomic figures released earlier on Tuesday have boosted confidence in the strength of the US economy, leaving clearing the path for the Fed to continue with its aggressive tightening path. This has sent the US dollar higher, thus weighing on crude prices.
US manufacturing activity has posted a positive surprise. The ISM PMI slowed down to 50.2 in October, better than the 50 reading expected and the S&P PMI confirmed the good news. October's 50.4 reading reveals that sector activity expanded, against the expectations of a moderate contraction, at 49.9.
Beyond that, the JOLTS job openings have shown an increase to 10.7 million vacancies in September, up from 10.2 million in August, instead of the decline to 10 million anticipated by the experts. These figures demonstrate the tight conditions of the US labor market, despite the Fed’s efforts to cool it off in order to curb inflation.
Previously, Oil prices had rallied more than 3% in a risk-on session amid growing speculation pointing out to a Fed pivot in December. The federal funds futures market had priced in a 57% chance of a 0.50% rate hike in December, which sent the USD tumbling across the board during the Asian and European sessions.
Technical levels to watch
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
AUD/USD holds gains near 0.7000 amid PBOC's status-quo, Gold price surge
AUD/USD is clinging to mild gains near 0.7000 early Monday. The pair benefits from a risk-on market profile, China's steady policy rates and surging Gold and Copper prices. Focus now remains on Fedspeak for fresh impetus.
Gold price hits an all-time high to near $2,440
Gold price (XAU/USD) climbs to a new record high near $2,441 during the Asian trading hours on Monday. The bullish move of the precious metal is bolstered by the renewed hopes for interest rate cuts from the US Federal Reserve (Fed).
EUR/USD gains ground above 1.0850, focus on Fedspeak
The EUR/USD pair trades on a stronger note around 1.0875 on Monday during the early Asian trading hours. The uptick in the major pair is bolstered by the softer Greenback. The Federal Reserve’s Bostic, Barr, Waller, Jefferson, and Mester are scheduled to speak on Monday.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
Week ahead: Flash PMIs, UK and Japan CPIs in focus. RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.