On Tuesday, the Dollar pulled away from a 13-month low against a basket of currencies trying to shake off a recent selloff after upbeat US economic data as investors awaited this week’s Federal Reserve meeting for clues on the timing of its next policy tightening.
The Fed is widely expected to keep interest rates unchanged at this week’s two-day meeting, which ends today. Investors will be watching for any fresh hints on whether the Fed might raise interest rates again this year, and when it will begin paring its Bond holdings.
On Monday, Markit’s flash surveys of US manufacturing and services both came in above expectations, which lifted US 10- year Treasury Yields and helped lend support to the greenback. However, the Dollar’s outlook remained clouded by worries that persistent political disorder would present obstacles to US President Donald Trump’s stimulus and tax reform agenda.
On Monday as well, the Rouble slid to 70 against the Euro for the first time since November, as concerns about possible new sanctions against Russia fueled selling pressure. The White House said on Sunday that President Donald Trump was open to signing legislation toughening measures against Russia. The theme of sanction pressure from the United States is overwhelming the minds of those who invest into Russian assets. The Kremlin expressed concerns that new sanctions could hurt major investment projects with European partners.
As for Oil prices, they extended gains yesterday, after Saudi Arabia promised deep cuts to Crude exports next month, emphasizing its commitment to eliminating a global supply glut even as fellow OPEC members Libya and Nigeria were told they are free to keep increasing output.