25 July 2016 at 23:30 GMT
US Data released:
The US dollar had a somewhat choppy day and when it was all said and done, didn’t stray too far from its opening levels, except against the Japanese yen and the Canadian dollar. USDJPY retreated in part because traders were concerned that the market could be disappointed with the anticipated Bank of Japan stimulus, expected to be announced on Thursday.
USDCAD soared as oil prices sank. EURUSD lost ground in the morning and then recouped all of the losses in the afternoon.
The oil market got a lot of attention. WTI dropped steadily throughout the day, falling from $43.92/barrel to a low of $42.93/b.
The fear of rising supply, especially gasoline, an increase in rigs combined with dwindling demand from the end of the “driving season” - and slowing global growth - were all behind the move.
The same supply/demand imbalances were evident as far back as mid-June when WTI was at $50.00/b but were ignored. Oops.
US equity indices gave up a little ground and closed in the red, undermined in part by weaker energy shares due to the oil price decline.
Overstocked? WTI oil declined steadily overnight, hitting as low as $42/b. Photo: iStock
Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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