Chair Powell To Lead Fed Speakers
On the Fed side, Chairman Jerome Powell’s semi-annual congressional testimony scheduled for Wednesday and Thursday will play a major role in defining the next curve of a directional move for the dollar.
The dollar traded up on Monday morning in Asia. Risk currencies remained above their recent lows against both the US currency and the yen as investor fears of a slowdown in the global economic recovery from COVID-19 calmed down for now.
Other Fed speakers this week will be New York’s John Williams, Minneapolis’ Neel Kashkari, Atlanta’s Raphael Bostic, Boston’s Eric Rosengren and Chicago’s Charles Evans.
On the oil front, US crude’s WTI, or West Texas Intermediate, benchmark traded below $74.40 a barrel. London’s Brent crude hovered at under $75.40.
Oil: OPEC Watch Continues
WTI ended last week with a modest 0.6% drop while Brent lost 0.8% on the back of OPEC concerns.
TD Securities said in a note:
“A material rally or decline is unlikely until the market hears details on how the OPEC+ group settles the request from the UAE to increase its production base. If the producer group limits monthly supply increases to the previously discussed 400,000 barrels per day per month through December, we project that WTI may well challenge $80 per barrel some time during Q3-2021, despite COVID-19 Delta variant risks.”
An end to Iranian sanctions may or may not have a material negative impact on oil, depending on OPEC’s reaction, TD Securities said, adding: “If no OPEC+ plus deal is made and all members produce to capacity, there will be a very large surplus and prices may see very sharp declines.”
Finance ministers from the Group of 20 countries, meanwhile, said at their meeting on Saturday that Delta outbreaks could force new restrictions on society and business.
That, in turn, casts a shadow over the fuel demand outlook outside the United States, especially Asia and Australia.