Market Snapshot – US Dollar Rises on Rate Hike Hints

US Dollar Rises on March Rate Hike Hints

The markets woke this morning with the Dollar bulls in the driving seat and, while the U.S administration may have managed to hold back any Dollar rally over the last week, there will likely be a realization of just how much influence the FED and monetary policy has on the direction of the Dollar, with even a decision to delay tax reforms, failing to peg back the Dollar ahead of the release of February’s FOMC meeting minutes tomorrow evening.

The US Dollar rose broadly after two of the FOMC members pointed for a possible rate hike in March.

The dollar is also taking a cue from higher US treasury yields as all 10Y US bond is up 1.20%. The US Dollar Index is trading at 101.54, gaining 0.61%, with the EUR drop down 0.72% at $1.0536.

Oil Prices Jump as OPEC aims for a Deeper Output Cuts

Oil futures spiked higher shortly before the regular session opening as investors continued to react positively to the news that OPEC is sticking with its plan to cut daily output and as investors become more optimistic about the plans success.

Traders are primary reacting to the news that OPEC Secretary General Mohammad Barkindo said January data showed conformity from participating OPEC nations without curbs had been above 90 percent and oil inventories would decline further this year.

Crude oil is trading at $54.72 a barrel, up 1.75% while Brent Crude Oil is trading at $57.05 up 1.55%.

Global Stocks Move Mostly Higher

European stock markets are mostly higher. The DAX managed to move further above 11800 while the FTSE 100 continues to underperform. Asian stock markets also traded mixed overnight. Japanese markets benefited from a weaker Yen, and the Nikkei closed with a 0.68% gain, after hawkish Fed comments buoyed the Dollar. The CSI 300 was up 0.33% at the close, while Hang Seng and ASX 200 headed south.

In Europe stronger than expected PMI readings helped the DAX to move higher, but markets continue to eye Le Pen’s rise in the polls with concerns and CAC 40 underperformed while French yields continue to rise amid Frexit speculation.

Gold Priced Edged Down as Traders Await Rate Hike Details

A spike in the U.S. Dollar is helping to put pressure on April Comex gold futures on Tuesday. The notion that the Fed will raise rates in March is the driving force behind the dollar’s strength. When the dollar strengthens, demand for dollar-denominated gold tends to drop.

A rate hike in March could probably confirm that we are going to have at least three rate hikes this year and this should greatly cheer the dollar bulls who are then likely to take control.

The Gold is trading in a bearish sentiment on Tuesday at 1230.35, down 0.71%.