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US dollar falls, oil rises
Market participants expect US regulators to cut interest rates. The outlook for the US presidential election is uncertain. Kamala Harris and Donald Trump have roughly equal chances of winning. What will the next week be like for investors and what will happen to oil prices?
Trading activity on the platform in the US slowed ahead of the presidential election and the Federal Reserve's interest rate decision. Against major currencies, the US dollar index (DXY) fell 0.6% to 103.64. Global oil prices rose almost 3% on Monday. Brent crude rose above $75 a barrel for the first time since late October, according to trading data.
Investors are bracing for a potential turnaround in the global economy this week, with election forecasts showing both candidates are roughly evenly matched. Markets are also expecting the Federal Reserve to cut interest rates by 25 basis points at its meeting on Thursday, November 7. That could have a big impact on bond yields. Alexander Timofeev, director of financial markets and macroeconomic analysis at investment firm Eastern Gate, says:
The rise in oil prices was also influenced by the decision of OPEC+ to postpone the increase in oil production in December. According to Reuters, the organization takes into account the decrease in demand from China and the increase in oil production from countries outside OPEC+.
The World Bank has previously forecast that commodity prices will fall to their lowest level in five years. The bank predicts that the oil surplus in 2025 could exceed 1 million barrels per day. This would lead to a fall in global commodity prices of almost 10% between 2024 and 2026.