Forex▼ Bearish
Oil Slips 4% as Diplomats Push U.S.-Iran Talks; Dollar Eases
Oil slid 4% as profit-taking met diplomatic efforts on U.S.-Iran talks. WTI fell to $89, Brent to $95. The dollar eased, lifting EUR/USD and GBP/USD.
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Oil prices slid 4% on Tuesday. Traders booked profits after a strong rally, shifting focus to diplomatic efforts to restart U.S.-Iran negotiations. WTI crude settled near $89 a barrel, retreating from resistance at $91.50 to $92.00. Brent crude slipped toward $95, pulling back from the $100 level.
The pullback in crude weighed on the dollar. The greenback had gained during the oil rally on expectations of higher inflation and a tighter Federal Reserve. The dollar index eased as oil eased, giving room for currencies tied to commodity prices to recover.
EUR/USD rose toward 1.0850 as the dollar weakened. The pair had been under pressure from the oil-driven dollar strength. Traders said the euro's gain was modest, limited by the European Central Bank's cautious stance on rate cuts.
Sterling also firmed. GBP/USD climbed above 1.2700. The Bank of England's rate path remains a focus, the immediate catalyst was the oil-driven dollar move. A break above 1.2750 would open the door to 1.2800, traders said.
The Canadian dollar, sensitive to oil prices, strengthened against the greenback. USD/CAD fell toward 1.3650 as WTI's retreat eased concerns about Canada's export revenues. The pair's next support sits at 1.3600, with resistance at 1.3700.