Dollar Rallies ahead of FOMC Minutes

USD

The dollar index, which measures the greenback against a basket of major currencies, rose towards 98 ahead of the European trading session supported by investors flow to safer assets. Investors are worried that the rising tension between China and the United States could affect their trade talks. On the other hand, market participants are looking forward to the latest FOMC meeting minutes to grasp further hints about the economic outlook and future path of interest rates. The US 10-year yields dipped to 1.729%, and the CME Fed Watch tool showed an increased probability of interest rate cuts in Q3 2020. The buck firmed against the British pound with GBPUSD dropping to $1.2890 following an inconclusive election debate between Prime Minister Boris Johnson and Labour Leader Jeremy Corbyn.

Metals

Gold prices surged as US Treasury yields plunged to a two-and-a-half-week low. Market participants were seen shifting towards safe-haven assets as risk-on boosters dried up. The price of a gold ounce rose to $1478, the price of a silver ounce edged higher to $17.18, and palladium climbed to a two-week high of $1775.

Oil

Oil prices fall to a three-week low on supply concerns. Reuters reported that Russia would likely reject a proposal to deepen its production cut in the coming OPEC+ meeting on the 5th and 6th of December. On the other hand, the American Petroleum Institute reported a rise of 5.954 million barrels in US crude oil stock last week. The US Energy Information Administration will publish the official numbers later today. The West Texas Intermediate crude futures dived to $54.83, and Brent futures declined to $60.27.

Major Economic Events

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