Dollar Rebounds Sharply Post Fed Minutes; Stock Futures Tumble

Dollar

The dollar index, which measures the greenback against a basket of major currencies, rebounded sharply from its lowest levels in more than two years to trade at a high of 93.10. The Federal Reserve monetary policy meeting minutes boosted the upside rally, as the minutes failed to give insights on whether the Fed could be adopting further easing measures, easing some stretched bets over increased support to boost the recovery. However, the minutes revealed that the Fed is expecting a softer recovery as the downside risks to the economy remain highly elevated. Market participants are looking forward to the US jobless claims later on the day, to have better inputs into the labor market recovery. Last week's release showed that claims rose by less than 1 million, the lowest increase since the outbreak in March. The dollar was significantly stronger against rivals, where the EURUSD tumbled to $1.1830, the GBPUSD declined to $1.3064, and the AUDUSD fell to $0.7160.

Equities

Major US stock index futures drifted lower following the FOMC meeting minutes. The minutes unveiled that the Fed is expecting a less robust recovery in the second half due to the continuous spread of COVID19, which is keeping a significant uncertainty around the economic recovery. However, the announcement from the Chinese Commerce Ministry that China and the United States will hold trade talks in the coming days, aided in easing investors' woes. The Dow Jones Industrial Average futures hovered near 27500, the S&P500 futures traded near 3350, and Nasdaq futures dipped to 11270.

Metals

Precious metals fell sharply as the dollar recovered post the Fed minutes. The price of a gold ounce plunged to $1924, the price of a silver ounce dropped to $26.49, and palladium futures descended to $2160.

Oil

Oil prices continued to trade in a tight range awaiting fresh drivers despite the drop in US inventories. The US Energy Information Administration reported a decline of 1.632 million barrels in US crude oil inventories. On the other hand, the OPEC_ Joint Ministerial Monitoring Committee meeting concluded by stressing the need for full commitment to the agreed cuts. The West Texas Intermediate October delivery eased to $42.61, and Brent blend October delivery dropped to $44.88

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