Oil Drops Again as Investors Eye Fed Minutes
Commodities are trading lower this morning after oil prices dropped again and gold remained firm. Brent crude has fallen more than 18% in a week, while gold is up nearly 1.5% today. The cautious mood comes ahead of key central bank speeches and the release of the FOMC minutes later today. These may offer clues on the Federal Reserve’s next policy steps. Meanwhile, the U.S. dollar is broadly weaker. Safe-haven flows are supporting the yen, Swiss franc, and precious metals.
Key Events – Wednesday, April 9
- BoJ Governor Ueda Speech:
Market participants will be parsing any clues around the Bank of Japan’s policy path following last month’s surprise adjustment. The yen is firmer on safe-haven flows.
- ECB’s Cipollone and Fed’s Barkin Speeches:
These are unlikely to move markets dramatically, but may offer context around the ECB’s inflation outlook and the Fed’s reaction function heading into the second quarter.
- FOMC Minutes (18:00 GMT):
With inflation stickier than forecast and labor markets cooling slightly, traders are watching for signs that the Fed may delay any shift in its current rate stance.
Commodities
- Crude Oil:
- WTI: $57.94 (-2.75%)
- Brent: $61.34 (-2.35%)
Oil is under heavy pressure, extending losses after the U.S. imposed 104% tariffs on Chinese imports, triggering fears of a broader global slowdown and reduced energy demand. Analysts are warning of a slide toward $40 per barrel in a worst-case scenario.
- Gold:
- $3,022.72 (+1.49%)
Gold continues its rally, benefiting from safe-haven demand amid rising geopolitical uncertainty and falling real yields. Up over 15% YTD, the metal is regaining momentum after a brief correction.
- $3,022.72 (+1.49%)
- Silver:
- $30.09 (+1.69%)
Silver is following gold higher, also supported by inflation hedging and some demand from industrial buyers.
- $30.09 (+1.69%)
Currency Movements
- EUR/USD – The euro is gaining against the dollar, up 0.81% to 1.1050. The EUR/USD pair continues to benefit from weak U.S. data and dollar fatigue.
- GBP/USD – The British pound has climbed to 1.2830 (+0.51%) as the GBP/USD exchange rate recovers some ground following last week’s pressure.
- AUD/USD – The Australian dollar is trading at 0.5983, up 0.47%, recovering from recent lows as markets stabilize.
- NZD/USD – The New Zealand dollar is slightly weaker at 0.5545, with the NZD/USD pair down 0.07%, underperforming other risk currencies.
- USD/JPY – The dollar is losing ground against the yen, down 0.67% at 145.29. The USD/JPY pair is slipping as risk sentiment worsens.
- USD/CHF – The dollar is down 0.56% against the Swiss franc at 0.8433, reflecting broader safe-haven demand.
- USD/CAD – The loonie is stronger, with USD/CAD down 0.33% to 1.4217, tracking oil volatility and upcoming Canadian data.
- USD/MXN – The dollar is up 0.15% against the peso at 20.88, with the USD/MXN pair continuing to reflect EM risk sensitivity.
- USD/INR – The rupee is weaker, with USD/INR up 0.17% to 86.59, marking a cautious tone among Asian currencies.
- USD/CNY – The yuan is under pressure, with USD/CNY up to 7.3831 (+0.58%), amid trade tensions and soft Chinese growth signals.
Market Outlook
Markets remain cautious ahead of tonight’s FOMC minutes, which could offer clues on how long the Fed intends to hold rates steady. The collapse in oil prices has amplified fears of a growth slowdown, especially with the U.S.-China trade spat escalating. Meanwhile, gold’s strength signals persistent investor demand for protection in a shaky macro environment.
The dollar is mixed, losing ground against G10 majors but still firm versus some emerging market currencies. Unless the FOMC minutes deliver a clear dovish shift, traders may remain defensive through the week.