On Thursday, the United States dollar continued to rise against the Japanese safe-haven yen as the Federal Reserve amplified expectations for a possible interest rate hike in December. The greenback traded at 112.430 yen JPY=, which was 0.2% higher from the previous trading day. Meanwhile, the dollar was also an inch higher against the euro which slipped by approximately 0.1% and traded at $1.1886 after shedding 0.8% on Wednesday.
According to the dollar index, the greenback was firm and steady against its six major currency rivals standing at 92.542 along with a near two-week high of 92.697 which was set overnight when the dollar added 0.8% to its value.
In its policy meeting, the Federal Reserve left interest rates unchanged as anticipated yet hinted at the possibility of a rate hike by the end of 2017. This is despite the currently low inflation rate. All in all, investors estimate a 70% chance that interest will be raised in December – higher than the 50% expectation prior to the Fed meeting.
Pressured by the current rise in the United States crude inventories and production along with a stronger greenback, the prices of oil fell sharply. The international benchmark, Brent crude futures, was down by 0.3% or 16 cents and traded at $56.13 a barrel; the United States West Texas Intermediate went down by 1 cent from its previous close and traded at $50.68 a barrel.
The United States crude stocks and production were ascending gradually. Crude inventories, C-STK-T-EIA, edged up for a third straight week, producing 4.6 million barrels in the week ending September 15, towards a total yearly output of 472.83 million barrels. U.S oil production had already recovered from the shutdowns caused by the recent hurricanes, and is now standing firm at 9.51 million barrels per day.What is more, the reinforced greenback has exerted pressure on Brent crude. The stronger dollar possibly obstructs fuel consumption in other countries that use other currencies. At the same time, the accelerating crude supplies and production in the U.S. had placed heavy weight on the West Texas Intermediate.