North Korea Tensions Continue Weighing on Market

The dollar erased recent gains on Tuesday morning and Asian stocks pulled back on fears that U.S. tensions with North Korea will continue to mount, following a failed missile send on Sunday.  Traders were also on edge on Tuesday in advance of an economic dialogue between the United States and Japan.  
The dollar hit a five-month trough of 108.130 on Monday and was trading at 109.040 on Tuesday morning on expectations that Washington could act harshly against Japanese trade, since President Trump has been vocal about his believe that Japan has been manipulating its currency.  A stronger dollar is also thought to be influencing exports, as U.S. trade is primarily dependent on a weaker dollar to encourage trade growth.  Trump’s campaign promises to correct trade imbalances has kept traders wondering whether or not he’ll implement the hard line he mentioned during his campaign.

The dollar index was relatively flat on Tuesday morning, trading at 100.290. The euro was slightly higher, trading at $1.0652 following thin trading on Monday as most European markets were closed for Easter.

Oil Prices Fall on U.S. Production Fears

Oil prices were down on Tuesday morning on reports that U.S. production would continue to rise in the near term.  Brent crude futures eased 9 cents per barrel to $55.27 per barrel.  U.S. WTI crude futures were also down 9 cents per barrel, to trade at $52.56 per barrel.  U.S. data out on Monday forecasted that May will likely see the largest increase in monthly U.S. shale production in the past two years, with a rise of 123,000 barrels per day.  OPEC will also be meeting in May to determine whether to continue their production cuts and to evaluate other ways to respond to continued production increases in the U.S., which is now the world’s third-biggest oil producer. 

Sara Patterson
Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.