Markets on edge ahead of the Fed FOMC and as geopolitical tensions rise
The escalating tensions between Israel and Hezbollah, along with some caution ahead of tomorrow’s FOMC meeting, have given the safe-haven Dollar a boost. The DXY index is up at 104.56, with the Dollar holding firm at 1.0825 against the Euro, 1.2858 against the Pound, and 154.58 against the Yen. Short Dollar positions on the back of the rate-cut bets were trimmed yesterday and riskier assets were sold off. EM currencies traded weaker yesterday with the Rand down 1.15% at one point as it touched R18.52 before managing to pull back to close at R18.44. The local currency is currently trading unchanged in line with flat EM markets.
Commodities mixed in muted markets
Commodity prices are mixed this morning in a very quiet Asian trading session as traders await tomorrow’s Fed and BOJ monetary policy meetings. Precious metals are marginally firmer this morning but base metals have opened in the red. Brent crude fell nearly 2.0% to $79.78 yesterday as rising demand concerns, notably out of China, and a stronger Dollar offset the geopolitical fears. Brent crude has opened a further 0.4% lower at $79.48 this morning, while WTI sits at $75.49.
