05.03.2019: USD benefits from threat of China’s slowdown (USD, DJIA, BRENT)
The US dollar is still trading higher. Traders are anticipating data on the US labor market which is due on Friday.
The US dollar index is still testing the resistance level of 96.80. Today a non-manufacturing PMI from the Institute for Supply Management could be bullish for the index, so that it could break above that level and develop a rally.
Meanwhile, dollar bulls are in the wait-and-see mood, digesting the comments of Boston Federal Reserve President Eric Rosengren. In his speech, the Fed’s hawk and a voting member supported a pause in the cycle of monetary tightening. Citing Mr. Rosengren, the rate-setting committee has to hold several meetings before it ventures into another change in monetary policy.
The US stocks opened today on a positive note. The stocks received a boost as investors are betting on the soonest resolution of the trade conflict between the US and China. The Dow Jones Industrial Average index aims to regain yesterday’s losses which were triggered by the news that China downgraded its outlook on economic growth.
Nevertheless, the oil market did not show any notable response to the news, even though China’s economy is one of the top energy consumers in the world. Meanwhile, the Brent benchmark is trying to reach 66 US dollars per barrel.
Although, it will hardly touch that level as oil traders remain cautious. Oil quotes are under pressure amid a slowdown in China’s economic growth. Besides, the recent information about growing oil supplies is also bearish for oil prices. Today the news broke that the El Sharara has resumed its operations. It is the largest oilfield in Libya that has been closed since December 2018.
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