Mixed Dollar as Oil Prices Slide
The U.S. Dollar is trading in mixed ranges after oil prices fell to their lowest level in nearly two weeks.
Brent Crude is trading around $98.50 per barrel and WTI Crude around $93.50 a barrel. This downward pressure is being driven by news reports out of Saudi Arabia indicating that they are preparing to resume oil flows through the crucial East-West pipeline and loadings at the Red Sea port of Yanbu this week. Japan’s Kyodo News also reported that Tehran is prepared to negotiate a reopening of the Strait of Hormuz, with a lifting of the U.S. Naval blockade as the starting point for mediation. President Donald Trump is scheduled to address the United Nations General Assembly this morning and although no meeting is currently scheduled, the opportunity for him to meet with the Iranian representative on the sidelines is there.
What to Watch This Week…
- Fed Meeting and Presser on Wednesday 2PM
- Bank of Japan Decision on Friday
- USA Online is always open
The complete Economic Calendar can be found here.
NZD
The New Zealand Dollar is the G10’s best performer this morning following hawkish remarks from Reserve Bank of New Zealand Governor Anna Breman. Breman stated that New Zealand’s economic recovery is continuing, but that near term inflation will likely remain higher than the RBNZ’s predictions should oil prices remain elevated. This has resulted in Traders repricing expectations for interest rate hikes at the RBNZ’s October meeting, with an approximately 73% probability of a hike now priced in based on Overnight Index Swaps.
GBP
The British Pound is down against the Buck this morning, falling to a seven-week low, after data out of the United Kingdom showed that Public Sector Net Borrowing for the month of August came in at GBP 18.3 billion, more than GBP 3.5 billion above the Office for Budget Responsibility’s forecast. This has exacerbated concerns that Chancellor of the Exchequer John Healey could be forced to find ‘flexibility’ in its fiscal rules ahead of his first budget, which would put pressure on longer-dated U.K. government bonds. 10-year yields rose slightly on the data.