The dollar held steady against its primary trading partners on Thursday after the Federal Reserve held rates steady but noted that inflation is likely to continue rising, signaling that there are likely to be interest rate hikes in the coming months after Jerome Powell assumes his position as the Federal Reserve Chair. The dollar index was modestly lower, down 0.02 percent to 89.08 .DXY as of 1:45 p.m. HK/SIN. The dollar index closed January 3.2 percent lower.
The dollar was down 0.05 percent against the euro, trading at $1.2426, while it posted gains against the yen, finally breaking above 109, to trade at 109.29. Traders are now awaiting tomorrow’s non-farm payroll reports as another sign of the economy’s direction.
Commodity Markets
Oil prices started February with an uptick, bolstered by strong compliance by OPEC companies for the production cuts imposed last year and intended to run through 2018. Despite OPEC’s cuts, U.S. crude oil production exceeded 10 million barrels per day in November for the first time since 1970 and has been hovering near that point since, threatening to reverse the tight pricing brought about by OPEC’s cuts. Because of these opposing factors, analysts are dubious as to whether oil will break above $70 as OPEC had originally hoped.
U.S. WTI futures were up 0.25 percent on Thursday mid-afternoon, to $64.89 per barrel, and Brent crude futures were up 0.26 percent to $69.07, dancing around the important level, but remaining far enough away to dash analysts’ hopes for a breakthrough.