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MTrading Team • 2023-08-14

Crude oil drops 1.0% as demand fears join firmer US Dollar

Crude oil drops 1.0% as demand fears join firmer US Dollar

Risk aversion returns to the table as China-linked woes join the market’s anxiety about the major central bank’s next moves. Adding strength to the sour sentiment were the firmer US Treasury bond yields suggesting the economic contraction.

With this, the US Dollar renews monthly top and exerts downside pressure on the commodities, as well as Antipodeans.

That said, the Gold price remains depressed at the lowest level in a month while Brent Oil fades the previous day’s corrective bounce while extending the last week’s pullback from the yearly high.

Elsewhere, AUDUSD drops the most among the major currencies, followed by the NZDUSD, whereas EURUSD appears the least affected after the German whole price index came in mixed for July.

Furthermore, stock futures in the US and Europe print mild losses whereas the Asia-Pacific shares dropped to the lowest level in a month.

It should be noted that the BTCUSD and ETHUSD edge higher while taking a sigh of relief amid chatters that the US Republicans will be good for ETFs.

Following are the latest moves of the key assets:

  • Brent oil drops 1.0% to $85.75 before recently bouncing to $86.00, down 0.75% at the latest.
  • Gold price stays pressured at the lowest level in a month, making rounds to $1,915 by the press time.
  • USD Index fades the week-start run-up while retreating from the one-month high to 102.90 as we write.
  • Wall Street benchmarks closed mixed but the stocks in the Asia-Pacific zone marked losses. That said, equities in Europe and UK trade mixed by the press time.
  • BTCUSD and ETHUSD print near 0.40% intraday gains each to around $29,400 and $1,850 of late.
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Sentiment sours as China fears escalate

Fresh fears of debt repayment fallouts loom over China and join the pre-established concerns about the dragon nation’s softer economic recovery to weigh on the risk profile on early Monday. Also challenging the traders’ sentiment is the cautious mood ahead of Fed Minutes, especially after the latest failure of the mostly upbeat US data to lift the hawkish Fed bets.

Elsewhere, downbeat mid-tier NZ numbers and fears surrounding China weigh on NZDUSD but the EURUSD floats near the one-week low as the latest figures from the bloc, as well as from Germany, came in mixed to confirm dovish ECB talks.

It’s worth observing that the US Dollar struggles to defend the early-day run-up as traders rethink about the hawkish Fed concerns amid a light calendar, which in turn allows the pessimists to catch a breather after a downside start of the week.

On a different page, hopes of upbeat US regulations joined the fears of crypto industry leaders’ fight with the US SEC to prod the BTCUSD and ETHUSD traders. Even so, both these pairs lick their wounds at the lowest level in a week.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

No major data/events to shake the markets

While the early-day risk aversion may join the Fed-linked indecision to entertain market players, a lack of major data/events and Tuesday’s holidays in multiple European markets can challenge the momentum traders moving forward. Additionally, the cautious mood ahead of this week’s top-tier UK data and Fed Minutes, as well as the RBNZ, can also test the market moves.

May the trading luck be with you!