Tuesday, as investors turned their attention to the North Korean missile launch over Japan, the United States dollar edged up against its major currency rivals recovering from its lowest level in more than two and a half years. According to the dollar index, the greenback was up by 0.1% closing at 92.336 rising from 91.621, the currency’s lowest point since January 2015.
Shahab Jalinoos, global head of FX strategy at Credit Suisse in New York, said that the current Korean crisis can be classified in the known/unknown category the like of which investors have never been. Therefore, the market’s ability to recover from this event can be really high. Indeed, despite the geopolitical tension in the Korean Peninsula, the U.S. dollar, which had touched a low of four-and-a-half month against its safe haven Japanese counterpart, managed to regain more than 0.5 percent closing at ¥109.89.
The prices of oil went lower. The United States West Texas Intermediate crude futures was traded at $46.35 a barrel, falling by 9 cents. Brent crude futures, the international benchmark, was traded at $51.94 per barrel, 6 cents lower in comparison to the previous session.
On the other hand, due to the devastation caused by Hurricane Harvey in Texas, prices of gasoline in the United States ascended rapidly; RBc1 was traded at $1.8380 a barrel which was approximately 3% higher from its previous close. Diesel futures Hoc1 were traded at $1.6854 per barrel climbing by 1.2%.In a note to its clients, Goldman Sachs said that as of August 29, there was a drop of around 4.1 million barrels per day from offline refining production estimated at 23% of the total U.S. refining production. They have also claimed that an approximate amount of 1.4 million barrels per day of crude oil production was interrupted, which is equivalent to 15% of total United States supply.