A sharp decline seen in crude oil prices helped the market mood improve in the second half of the day on Monday and made it difficult for the US dollar to preserve its strength.
In European trading on Tuesday, the DXY Dollar Index remained below 99.00 and continued to edge lower. The US economic calendar features Existing Home Sales data for February and the Automatic Data Processing (ADP) will publish the Employment Change 4-week Average.
Energy Ministers from G7 members will reportedly hold a virtual meeting on Tuesday to discuss a possible release of crude oil reserves to address the supply disruption triggered by the Iran war.
After hitting its highest level since June 2022 above $110 at the weekly opening, West Texas Intermediate turned south and closed deep in negative territory on Monday. Early Tuesday, WTI corrected higher, but remains well below $90.
Late Monday, US President Donald Trump hinted that the operations against Iran could end soon, saying that “the war is very complete, pretty much.”
Meanwhile, Iran’s Islamic Revolutionary Guard Corps responded that Tehran will determine when the war ends, not the US, and warned that they could block regional oil exports if the US and Israeli attacks continue.
Wall Street’s main indexes closed in positive territory on Monday and US stock index futures were last seen rising between 0.2% and 0.3%, reflecting a risk-positive market atmosphere.
After falling toward $5,000 early Monday, Gold staged a rebound and erased a large portion of its daily losses. XAUUSD gained traction on Tuesday and climbed toward $5,200.
EURUSD made a sharp U-turn following the bearish action seen in the first half of the day and registered marginal gains on Monday. The pair held its ground in the European session and trades at around 1.1650.
The data from China showed earlier in the day that exports surged by 21.8% on a yearly basis in February and imports increased by 19.8%.
After posting strong gains on Monday, AUDUSD continues to push higher and trades above 0.7100. Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said on Tuesday that volatility in oil prices and the Middle East is a genuine challenge for central banks, adding that the policy response depends on the size and persistence of the price shock, which is very uncertain.
GBPUSD benefits from improving risk mood and trades at a fresh 10-day high above 1.3470 early Tuesday.
USDJPY remained under modest bearish pressure and trades below 157.50 after posting small losses on Monday.
(Source: OANDA)
