Despite a sharp decline in oil prices by over $7, U.S. dollar remained mostly higher due to expectations of Fed's cautious yet potentially hawkish stance on interest rates.
Crude oil prices fell sharply by more than $7 today as geopolitical tensions eased slightly between the United States and Iran, but this did not significantly impact other financial markets. The U.S. dollar managed to hold its ground despite a significant drop in crude oil due to expectations of an upcoming Federal Reserve decision.
The decline in oil was partly driven by reduced military tension; however, traders remain cautious given persistent risks. Crude prices closed at $81.88 per barrel after dropping -$7.48 from the previous session's high.
In economic news, U.S. durable goods orders rose 0.3% in June, significantly below expectations of a 2.5% increase. This signals softer manufacturing demand than anticipated and follows a revised May decline of 4.0%, underscoring volatility in this series influenced by large transportation orders.
However, the core capital goods orders were more encouraging, rising despite elevated interest rates and economic uncertainty. The Fed's upcoming decision remains pivotal; there is a 37% chance for a hike of 25 basis points, with odds increasing to 55% in September.
Among major currencies, USDCHF reached fresh year-to-date highs as the Swiss National Bank maintained its interest rate at zero percent until late 2027. The GBPUSD also fell below recent lows, while AUDUSD benefited from higher gold prices and remained on a positive trajectory against the U.S. dollar.
The EURUSD tested but did not break through key support levels, with the price just above its 100-hour moving average at 1.1371 after retracing gains from Friday's close to 1.1368. The USDJPY reached a new high for the day in North American trading before settling down.
Overall, while oil prices fell significantly today, other markets like stocks and bonds did not fully follow suit due to ongoing geopolitical concerns and expectations of Fed policy changes.
Source: InvestingLive. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.