Oil Supply And Risk Sentiment Suggest More Upside For US Dollar – Investing.com

US oil dollar upside
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Oil Supply And Risk Sentiment Suggest More Upside For US Dollar – Investing.com

There is more upside for the dollar in the near term as the OPEC+ agreement to increase oil supplies, weighs on energy companies in Asia and adds to the negative tone from last week’s equities close. The outlook for growth is also a bit gloomy as global virus cases spike again.   The dollar is losing its reaction function to falling Treasury yields, which suggests that it is attracting safe-haven flows. Since the start of July, 10-year yields have declined around 18bps, yet the has been moving higher.   FX markets are likely to find liquidity at below-average levels for the next few weeks and that will exaggerate the impact of any stop-loss selling while USD longs are far from being extreme, reflected in trader positioning. In the latest CFTC data, leveraged traders trimmed net shorts, while adding to longs in , , and .   The grand OPEC+ bargain, to boost production, raise baselines, and make nice again, sets the stage for slightly lower oil prices. The deal carries the potential for to revisit the $60s/bbl in the coming sessions and could follow, but declines will not be too painful.   A tight market will