The dollar index held firm on Wednesday against six currencies closing at 97.321 after dropping 0.4% on Tuesday. The dollar managed to pull away from the 96.797 level, its lowest since Nov. 9. It is still facing concerns over U.S politics, specifically when it comes to suspicions of unlawful links with Russia in the course of the presidential campaign. The dollar also held firm versus its Japanese counterpart closing at 111.795 yen after leaping to 111.995 yen – the highest point this week.
In fact, the dollar gained momentum due to falling U.S. debt prices with the benchmark 10-year Treasury note yield climbing 3 basis points. Investors are now focusing on the Federal Reserve’s monetary policy stance, as the market expects the Fed to raise interest rate in this coming June.
With the abrupt changes in oil prices, OPEC is likely to extend its deal about production cuts, which will continue for the next nine months. This was announced by ministers and delegates on Tuesday. The oil producers group will meet this week to talk about how to tackle global oversupply of crude.
The OPEC deal was originally intended to last for the first 6 months since January 2017. However, with the rapid changes and unfinished rebalancing of supply and demand, Saudi Arabia—OPEC’s top producer, favors extending the deal by nine months as it seeks to speed up market rebalancing and prevent oil prices from dropping below $50 per barrel. Saudi Energy Minister, Khalid al-Falih, has gained support for the 9-month extension from OPEC’s second-biggest producer Iraq, and expected no objections from anyone else.This positive approach helped prices go up. Benchmark Brent crude oil LCOc1 was up 40 cents a barrel at $54.55 by 0810 GMT. U.S. light crude oil CLc1 was 35 cents higher at $51.82.