The euro remained steady during Tuesday’s Asian session after traders determined that Monday’s selloff following Italy’s referendum was overdone. The euro eased to $1.0751 during Tuesday’s Asian session after hitting a twenty-month low on Monday, while the dollar remained near a three-week low against it six major trading partners, with the dollar index trading at 100.1, down from above 101 on Monday. The Australian dollar fell to $0.7451 against the U.S. dollar after the Reserve Bank of Australia (RBA) voted to keep its cash rate steady at 1.5 percent as expected.
Asian markets bounced back from Monday’s selloff with Japan’s Nikkei 225 index jumping 0.42 percent and South Korea’s Kospi gaining 1.18 percent on Tuesday. Major European and U.S. closed higher on Monday as well, rebuffing initial beliefs that the Italian vote would shake the markets.
Oil Retreats
Oil prices fell on Monday as traders lost confidence that the OPEC deal would sufficiently reduce the overabundant supply. OPEC’s agreement last week confirmed the commitment of member states to cut production by 1.2 million barrels per day. This weekend OPEC and on-OPEC producers are scheduled to meet to expand the deal, though increased U.S. drilling has caused concern that even with the deal, the global efforts will not be sufficient to solve the problem. Non-OPEC countries are expected to agree to additional production cuts of 600,000 barrels per day.
On Monday U.S. WTI crude rose early but then retreated to lows of $51.11 per barrel. Brent crude prices took a similar trajectory, rising 48 cents per barrel before retreating to $54.22 per barrel.