Dollar downside halted as China Covid concerns deepen

The risk-off mood from the new surge in Covid infections in China saw a bid in the greenback. This offset the Fed speakers on the wires who were less hawkish than recent chatter.

It seems the dollar has been reasserting its safe haven status among its peers recently, over and above its rate-sensitive characteristics which had been driving the world’s premier reserve currency.

We get the release of the FOMC minutes tomorrow which may be seen as a little stale to markets, coming before the softer than expected US inflation data.

On the flip side, there has also been the majority of Fed speakers in recent weeks who have pushed back on the pivot enthusiasm.

We note the slew of officials due to speak today and through the week.

 

Oil prices whipsaw

Crude prices were subject to big volatility yesterday and made multi-week lows before rebounding sharply.

Monday’s session was a wild ride with new reports that OPEC+ was looking to increase supply at its next meeting on 4 December.

Saudi Arabia quickly denied these stories, and this led to sharp pullback from the lows which had briefly broken the September bottom in prices. It appears to be a strange move to ramp up supply when there is still so much uncertainty around demand.

This followed increased concerns about falling fuel demand in China and bond markets signalling a recession due to yield curve inversion.

Adding to this uncertainty in price action has been Russian supply, which could fall next month when tighter EU sanctions on its crude exports come into force.

 

 

US Dollar DXY Covid-19 China safe haven Federal Reserve rate hikes inflation Fed speak FOMC Crude Oil OPEC+ Recession