The dollar index, which measures the greenback against a basket of major currencies edged higher to 98.74 supported by the falling European currencies. The euro and pound account for almost 70% of the dollar index basket. The single currency dropped yesterday erasing gains earned following the European Central Bank monetary policy decision. Also, the British pound ran into profit-taking orders following an upside rally of more than 500 pips. On the other hand, the recent developments in the gulf region kept the dollar in request as investors preferred the dollar safety to risky assets. The EURUSD dropped to a low of $1.0990, the GBPUSD drifted lower to $1.2400, and the USDJPY edged higher to 108.37.
Gold prices inched lower during the Asian session as the dollar rallied. The Federal Reserve monetary policy meeting is considered a key driver for the next swing in gold prices. The market is widely expecting the Fed to cut interest rates by 25 basis points to curb the downside risks to the economic outlook. However, the latest developments in the gulf and the recently released economic data put the Fed in a tricky situation. The price of a gold ounce tumbled to $1493, the price of a silver ounce dipped to $17.73, and palladium faltered at a record high of $1628 and plunged to $1586.
Oil prices surrendered little gains during the Asian session but remained well elevated. The benchmarks continued to find support from the fact that it will take a quite long time for Aramco to restore the previous output levels. Market participants are looking forward to a press conference held by the Saudi Energy Minister later today to grasp hints about the output status and the response of the Kingdom to the attack. The West Texas Intermediate crude futures hovered above $62, and Brent futures edged higher towards $69.