Dollar quotations seem to stabilize after rather turbulent changes, which could be influenced by the statements of the Federal Reserve Chairman. In relation to the euro, the USD exchange rate reaches 1.1320 and the dollar index is around 96 points.
Markets have recently tried to price in the risks associated with the omicron coronavirus variant and hawkish remarks by Federal Reserve Chairman Jerome Powell.
Fed wants to be ready for a longer inflation fight
Powell reiterated to Congress on Wednesday that Fed policymakers will discuss ending the bond-buying program early at their next meeting. He also stressed the need to be ready to respond to the possibility that high inflation will not subside in the second half of next year. And that seems to be what most analysts expect.
Uncertainty around the new variant of the coronavirus and its impact on the economy could continue to weigh on the dollar. The United States just reported the first case of the omicron variant.
U.S. may back away from releasing strategic oil reserves
WTI crude oil futures appear to be stabilizing above $66 per barrel on Thursday. This comes amid expectations that OPEC+ may halt crude supply increases due to fears that omicron will weigh on the global economy and could reduce fuel demand as a result.
OPEC and its allies are expected to decide Thursday whether to release more oil to the market as previously planned. Or to cut supply as oil prices may have fallen due to concerns over a new variant of the coronavirus and the release of strategic reserves by major crude consumers, including the U.S.
David Turk, U.S. deputy energy minister, said President Joe Biden's administration could change the timing of the release of strategic oil stocks if global energy prices fall significantly. Meanwhile, official data from the EIA showed U.S. crude inventories fell less than expected last week, while gasoline and distillate stocks rose more than expected, likely due to weakening demand.
Omicron hurt Japan's stock market?
Foreign investors sold Japanese stocks on net for a second straight week, dumping risky assets after the omicron mutation emerged. The detection of a new version of the coronavirus prompted many countries to impose travel restrictions. It also fueled fears of a delayed global economic recovery.
Foreigners sold a net 309.6 billion yen worth of Japanese stocks in the week to Nov. 27, up from 47.2 billion yen the previous week. In the past month alone, the Nikkei index has fallen more than 6 percent toward 27,000 points.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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