Crude oil pares latest gains on downbeat China inflation, USD rebound

Having witnessed an upbeat close to the last week, backed by easing fears of hawkish Fed moves due to softer US employment data, the trading sentiment worsened on early Monday as China inflation numbers tease deflation. With the downbeat statistics from the world’s top-two economies, fears of recession regain the market’s attention and trigger the US Dollar’s recovery, as well as weigh on the Oil price.

That said, the USD pares the biggest daily loss in three weeks whereas Brent Oil eases from a 1.5-month high after rising in the last two consecutive weeks. The downbeat China and sour sentiment also weigh on the AUDUSD and NZDUSD prices. Furthermore, USDJPY rises the most among the G10 currency pairs as US dollar strength joins upbeat yields and BoJ’s bond market operations.

Moving on, Gold price also consolidates the previous day’s gains whereas EURUSD and GBPUSD print mild losses at the latest.

On a different page, BTCUSD and ETHUSD declined for the third consecutive day as fears from multichain hackers join broad US Dollar strength and escalating regulatory woes from the US SEC.

Following are the latest moves of the key assets:

• Brent oil retreats from six-week high, mildly offered near $78.00 by the press time.
• Gold price consolidates the biggest daily gains in three weeks near $1,923 as we write.
• USD Index prints the first daily gain in three around 102.45 at the latest.
• Wall Street closed with minor losses and weighed on the Asia-Pacific shares while equities in Europe and UK are mildly offered by the press time.
• BTCUSD and ETHUSD print minor losses to around $30,150 and $1,860 as we write.

Jittery markets underpin US Dollar recovery

Although the hawkish Fed expectations past July have been on the downturn after Friday’s downbeat US jobs report, the fears of economic slowdown allow the safe-haven US Dollar pare its first weekly loss in three.

Not only the fears of economic recession but the US and China’s top-tier economic status also flag concerns about receding Oil demand and exert downside pressure on the Brent price at the multi-day high. Also weighing on the UK’s energy benchmark is the fear of higher US Strategic Petroleum Reserve (SPR) release. However, Saudi Arabia and Russia’s readiness for the Oil output cut puts a floor under the crude oil.

On a different page, the BoJ undertakes a bond move to tame the Yen’s weakness, which in turn joins the broad US Dollar strength to propel the USDJPY while the other majors and Antipodeans bear the burden of the upbeat greenback amid a sluggish start to the inflation week.

Talking about cryptos, multichain hackers raise concerns about the need for more regulations and hence weigh on the leading cryptocurrency pairs like BTCUSD and ETHUSD.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

BoE’s Bailey in focus but US inflation clues are the key

Looking forward, Bank of England (BoE) Governor Andrew Bailey’s speech becomes an important event of the day. However, major attention will be given to the US CPI and UoM Consumer Confidence. Overall, this week’s economic calendar appears a bit lighter and may allow the US Dollar to pare recent losses.

May the trading luck be with you!