Dollar recovers as Fed fails to meet dovish expectations

NEW YORK- The US dollar rose against most major currencies on Wednesday, a day after the Federal Reserve delivered an expected rate cut but signaled little urgency to lower borrowing costs quickly in the coming months.

The dollar was supported by data that showed the number of Americans filing new applications for unemployment benefits fell last week, reversing the prior week’s jump.

The dollar’s broad strength pressured the British pound, erasing earlier gains logged after the Bank of England left rates on hold and slowed the pace of its government bond sales.

The Fed reduced rates by a quarter point on Wednesday, as expected, with Chair Jerome Powell characterizing the day’s policy action as a risk-management cut in response to the weakening labor market, but said the central bank did not need to rush easing.

Powell’s words fell short of the “unequivocal dovishness that the markets were expecting,” Eric Theoret, FX strategist at Scotiabank said.

The upbeat economic data on Thursday combined with the heavy selling the dollar had seen at the start of the week was enough to lift the dollar, Theoret said.

“I think the balance for the markets was kind of just leaning all to one side and so, it would have taken a lot to break the US dollar even further from here,” he said.

Analysts were divided on what to make of the Fed messaging.

While those at Goldman Sachs said that many hints had pointed to Wednesday’s cut being the first among many, their counterparts at ANZ characterized the Fed Chair’s commentary as “not at all dovish”.

The dollar dropped to the lowest since February 2022 at 96.224 against a basket of major peers immediately after the rate decision on Wednesday, but sprang back to trade up 0.4% at 97.347 on Thursday.

Meanwhile, the pound initially edged up after the BoE’s decision, but gave up those gains to trade 0.6% lower on the day at USD 1.35515. Sterling had briefly leaped to the highest since July 2 at USD 1.3726 in the prior session.

BoE policymakers voted 7-2 to slow the annual pace at which the central bank unloads the gilts that it purchased from 2009 and 2021 to 70 billion pounds from 100 billion pounds, broadly in line with a Reuters poll median forecast for it to be cut to 67.5 billion.

“We think the market is positioned too bearishly on the pound,” said Benjamin Ford, researcher at macro research and strategy firm Macro Hive.

The euro was 0.2% lower at USD 1.17893, after retreating from its highest level since June 2021 at USD 1.19185 on Wednesday in a knee-jerk reaction to the Fed announcement.

NORWAY CUTS RATES, YEN SLIPS AHEAD OF BOJ

The Norwegian crown fell 0.5% against the dollar after the Norges Bank cut rates 25 basis points to 4.0%, its second cut in three months. The central bank signaled rates could continue to fall.

Elsewhere, the dollar was 0.6% firmer against the Japanese yen at 147.88 ahead of the Bank of Japan’s policy decision on Friday.

The BOJ is widely expected to refrain from hiking rates, although markets price in a quarter-point increase by end-March, with about 50% odds of it happening within this year.

The spotlight is on an October 4 vote where the ruling Liberal Democratic Party will elect a new leader to replace outgoing Prime Minister Shigeru Ishiba, who is stepping down following a bruising defeat in upper house elections.

Data on Thursday showed that New Zealand’s gross domestic product (GDP) fell 0.9% in the second quarter from the previous three months, worse than forecast by analysts and the Reserve Bank of New Zealand.

This weighed on the New Zealand dollar, which fell 1.4% as traders added to bets on policy easing by the country’s central bank.

Cryptocurrency bitcoin was 1.9% higher at USD 117,837.

(Reporting by Saqib iqbal Ahmed; Additional reporting by Kevin Buckland, Jaspreet Kalra and Canan Sevgili; Editing by Sonali Paul, Gareth Jones, Frances Kerry, Philippa Fletcher)

Wall Street indexes notch record-high closes as Intel soars on Nvidia stake

Wall Street’s main indexes posted record-high closes on Thursday, a day after the US Federal Reserve delivered a quarter-point interest rate cut, while chipmaker Intel rose after Nvidia decided to build a stake in the company.

Intel clinched its biggest daily gain since October 1987, jumping 22.8% after Nvidia said it would invest USD 5 billion in the struggling US chipmaker. Peer Advanced Micro Devices slipped 0.8%.

Nvidia rose 3.5%, recovering losses from Wednesday when a report said Chinese tech firms might stop buying its chips.

The moves boosted a broader semiconductor index up 3.6%, and also lifted the tech-heavy Nasdaq and the S&P 500 technology sector up 1.36%. Seven of the 11 S&P 500 sectors gained.

Meanwhile, the small-cap Russell 2000 index notched its first record high close since November, at 2,466 points. Small-cap companies are likely to perform better in a low interest-rate environment.

On Wednesday, Fed Chair Jerome Powell emphasized that the softening jobs market was a priority and indicated more reductions could follow at upcoming policy meetings.

“We are looking for support for economic growth and justification of stretched valuations and the prospect of lower interest rates helps that,” said Sam Stovall, chief investment strategist at CFRA Research.

The Dow Jones Industrial Average .DJI rose 124.10 points, or 0.27%, to 46,142.42, the S&P 500 gained 31.61 points, or 0.48%, to 6,631.96 and the Nasdaq Composite gained 209.40 points, or 0.94%, to 22,470.73.

The biggest S&P sector decliners were consumer staples .SPLRCS and consumer discretionary stocks.

New data showed that the number of Americans filing new applications for unemployment benefits fell last week, but the labor market has softened as both demand for and supply of workers have diminished.

The rate cut is expected to add to Wall Street’s recent rally, boosted by monetary policy easing hopes and a revival of AI-linked stock trading. Investors are pricing in about 44.2 basis points in cuts by end-2025, data compiled by LSEG showed.

Among stocks, CrowdStrike gained 12.8% after at least nine brokerages raised their price target on the stock.

Shares of Darden Restaurants fell 7.7% after the Olive Garden parent reported weak quarterly results.

Advancing issues outnumbered decliners by a 1.87-to-1 ratio on the NYSE, and by a 2.5-to-1 ratio on the Nasdaq.

The S&P 500 posted 31 new 52-week highs and eight new lows while the Nasdaq Composite recorded 156 new highs and 42 new lows.

Volume on US exchanges was 19.30 billion shares, compared with the 16.67 billion average for the full session over the last 20 trading days.

(Reporting by Abigail Summerville in New York and Purvi Agarwal and Sukriti Gupta in Bengaluru; Editing by Maju Samuel and David Gregorio)

US recap: Dollar rises after Powell downplays rate cut

The dollar index reversed a loss after Fed Chair Jerome Powell downplayed the central bank’s
25 basis point cut to 4-4.25% and dovish guidance for the rest of the year amid a weaker
labor market.

Powell called it a risk management cut and said that he was not prepared to adopt a neutral stance at this point, noting, in part, the tariffs’ impact on goods inflation and the impact of immigration on the jobs market. He also avoided several questions addressing the possible political influence of Fed policy.

Fed projections show two more quarter-percentage-point reductions are anticipated this year. The median one-year projection fell to 3.4% from 3.6% with long-term projections steady at 3.0%.

Only new Governor Stephen Miran, who joined the Fed on Tuesday and is on leave as the head of the White House’s Council of Economic Advisers, dissented in favor of a half-percentage-point cut.

Treasury yields rose following Powell’s comments, reversing a loss after the initial Fed statement and rate cut. Data on Thursday includes closely-watched weekly jobless claims and the Philadelphia Fed business survey for September.

Scandinavian currencies and the Swiss franc slid against the broadly stronger greenback.

Separately, the Bank of Canada reduced its key policy rate to a three-year low of 2.5% and said it would be ready to cut again if risks to the economy increased in the coming months.

EUR/USD turned down after striking a fresh four-year high of 1.1919 after the Fed cut. The pair needs to slide below the July 1 high of 1.1830 and the nearby upper Bollinger to stall upward momentum.

GBP/USD was little changed with the Bank of England expected to hold rates steady at its policy meeting on Thursday.

USD/JPY reversed a drop beneath its 100-day moving average and 146 to test its cloud bottom at 146.66.

Treasury yields were up 2 to 3 basis points. The 2s-10s curve was up about 1 basis point to +52.2bp.

The S&P 500 was little changed on the session. Oil fell 0.93%, gold dropped 0.76%, while copper slid 1.56%.

Heading toward the close: EUR/USD -0.31%, USD/JPY +0.15%, GBP/USD -0.02%, AUD/USD -0.37%, DXY +0.31%, EUR/JPY -0.16%, GBP/JPY +0.13%, AUD/JPY -0.19%.

(Editing by Burton Frierson; Reporting by Robert Fullem)

Wall Street ends mixed, trade choppy after Fed’s rate cut, outlook

The Nasdaq and the S&P 500 closed lower in choppy trading on Wednesday, after the US Federal Reserve cut interest rates by an expected 25 basis points and Fed Chair Jerome Powell cited the weak job market.

The Dow closed higher after meandering during Powell’s speech.

The central bank indicated it will steadily cut rates for the rest of the year as policymakers signaled concerns about weakness in the labor market. The Fed projected two more quarter-percentage-point cuts this year.

In a press conference, Powell talked about the mounting downside risks of employment compared to inflation, but said inflation risks still must be assessed and managed.

This rate cut was already priced in by investors, according to data compiled by LSEG.

“Powell tempered some of the initial enthusiasm in the markets for a more aggressive path of monetary easing. He noted the softness in the labor market, but reserves a larger cut for more serious conditions that are not present today,” said Michael Rosen, chief investment officer at Angeles Investments.

“The Fed also raised its inflation forecast, highlighting the delicate balance between setting monetary policy to offset a weaker labor market versus bringing inflation lower,” he said.

The Dow Jones Industrial Average rose 260.42 points, or 0.57%, to 46,018.32, the S&P 500 lost 6.41 points, or 0.10%, to 6,600.35, and the Nasdaq Composite lost 72.63 points, or 0.32%, to 22,261.33.

Financial stocks like American Express helped boost the Dow.

The Fed’s decision and outlook will test Wall Street’s recent rally, which has been supported by rate-cut expectations and revived enthusiasm around AI-stock-linked trading.

Powell fielded several questions about the Fed’s independence from the executive branch.

On Tuesday, White House economic adviser Stephen Miran was sworn in as a Fed Governor, and an appeals court rejected US President Donald Trump’s attempt to sack Governor Lisa Cook.

Nvidia weighed on the Nasdaq. Shares fell 2.6% after a report said China’s internet regulator had instructed the country’s biggest tech companies to stop buying all of the AI leader’s chips.

Workday jumped 7.2% after a report that activist investor Elliott Management took a more than USD 2 billion stake in the human resources software provider.

Lyft popped 13.1% on the news that Alphabet’s Waymo would launch autonomous cab rides in Nashville next year in collaboration with the ride-hailing firm. Shares in rival Uber fell 5%.

Declining issues outnumbered advancers by a 1.02-to-1 ratio on the NYSE and by a 1.1-to-1 ratio on the Nasdaq.

The S&P 500 posted 18 new 52-week highs and five new lows while the Nasdaq Composite recorded 122 new highs and 45 new lows.

Volume on US exchanges was 18.91 billion shares, compared with the 16.47 billion average for the full session over the last 20 trading days.

(Reporting by Abigail Summerville in New York and Purvi Agarwal and Sukriti Gupta in Bengaluru; additional reporting by Laura Matthews; Editing by David Gregorio and Pooja Desai)

Yields higher after Fed rate cut, Powell comments

NEW YORK – US Treasury yields were mostly higher on Wednesday in choppy trading after the Federal Reserve cut rates by 25 basis points, which was widely anticipated, as investors awaited comments from Chair Jerome Powell for insight on the path of monetary policy.

In announcing the cut, the Fed indicated it will steadily lower borrowing costs for the rest of this year, as policymakers responded to concerns about weakness in the job market in a move that won support from most of President Donald Trump’s central bank appointees.

Only new Governor Stephen Miran, who joined the Fed on Tuesday and is on leave as the head of the White House’s Council of Economic Advisers, dissented in favor of a half-percentage-point cut.

“They have deemed that the downside risk to employment has increased, and therefore it would seem that they are weighting the labor market more than the higher inflation that they noted in their projections,” said Ellen Hazen, chief market strategist at F.L. Putnam Investment Management in Wellesley, Massachusetts.

“In other words, they are laying the groundwork for having a little bit easier policy.”

After the cut, Treasury yields initially erased gains and turned lower on the session before reversing course as Powell spoke, with the yield on the benchmark US 10-year Treasury note hitting a session high of 4.081%. It was last up 2.5 basis points at 4.051%.

The Fed Chair said the central bank is in a “meeting-by-meeting” situation regarding the outlook for rates and he doesn’t feel the need to move quickly.

Yields have fallen in recent weeks as a spate of economic data that indicated a softening of the labor market boosted expectations the central bank will be more aggressive in cutting interest rates. The 10-year note touched a 7-month low of 3.994% last week.

Prior to the Fed statement, markets were fully pricing in a rate cut of at least 25 basis points (bps) from the Fed, with a roughly 4% chance for an outsized cut of 50 basis points, according to CME’s FedWatch Tool.

Market expectations for a cut of at least 25 basis points at the central bank’s October meeting increased after the statement.

The Fed has been under significant pressure from Donald Trump’s administration to rapidly lower rates, and Trump has attempted to fire Fed Governor Lisa Cook.

The yield on the 30-year bond advanced 0.8 basis points to 4.654%.

Earlier economic data showed US single-family homebuilding and permits for future construction dropped in August amid a glut of unsold new houses and a softening labor market, unfazed by falling mortgage rates.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 52.3 basis points.

The two-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, climbed 1.6 basis points to 3.526%.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.46% after closing at 2.443% on Tuesday.

The 10-year TIPS breakeven rate was last at 2.383%, indicating the market sees inflation averaging about 2.4% a year for the next decade.

(Editing by Nick Zieminski)

Wall Street ends lower as investors turn cautious ahead of Fed rate decision

Wall Street’s three main stock indexes ended lower in choppy trading on Tuesday as caution set in ahead of an anticipated interest rate cut from the Federal Reserve.

Investors are largely still pricing in a 25 basis-point cut from the US central bank at the conclusion of its two-day meeting on Wednesday, to offset the deterioration in the US labor market, evidenced by numerous recent economic indicators.

Data on Tuesday showed that US retail sales increased more than expected in August, but that did little to change rate cut expectations.

“Any kind of resilient economic data will only reaffirm the hawks on the FOMC … and could give a little bit of fuel for (Fed Chair Jerome) Powell to come out as slightly more hawkish than the market is hoping for,” said Ross Mayfield, investment strategist at Baird Private Wealth Management.

Investors also brushed off news that the US Senate confirmed White House economic adviser Stephen Miran to the Fed Board and an appeals court rejected President Donald Trump’s bid to fire Fed Governor Lisa Cook.

The Dow Jones Industrial Average fell 125.55 points, or 0.27%, to 45,757.90, the S&P 500 lost 8.52 points, or 0.13%, to 6,606.76 and the Nasdaq Composite lost 14.79 points, or 0.07%, to 22,333.96.

Six of the 11 S&P 500 subsectors ended lower. The utilities and real estate sectors fell 1.81% and 0.66%, respectively.

The CBOE Volatility Index climbed to its highest level in more than a week to 16.04 points.

UnitedHealth Group shares fell 2.3% and Nvidia shares dropped 1.6%, weighing on the Dow. Nvidia shares fell after Reuters reported weak demand in China for its new AI chip.

The S&P 500 and the Nasdaq closed at all-time highs on Monday after hitting intraday records in multiple sessions. The three main indexes had gained so far in September – a month traditionally deemed bad for US equities.

Webtoon Entertainment soared 39% after a deal with Disney to create a new digital comics platform to feature content from Disney’s portfolio, including the Marvel and “Star Wars” franchises.

Oracle rose 1.5% after Trump said that the US and China have a deal that will keep the short-video app TikTok operating in the US and multiple news outlets, citing sources, said Oracle is part of the investor consortium.

On the Nasdaq, advancing issues outnumbered decliners by a 1.01-to-1 ratio. Declining issues outnumbered advancers by a 1.07-to-1 ratio on the NYSE.

The S&P 500 posted 15 new 52-week highs and 13 new lows while the Nasdaq Composite recorded 89 new highs and 58 new lows.

Volume on US exchanges was 17.11 billion shares, compared with the 16.31 billion average for the full session over the last 20 trading days.

(Reporting by Abigail Summerville in New York and Purvi Agarwal and Sukriti Gupta in Bengaluru; Editing by Maju Samuel and Matthew Lewis)

US yields edge lower after data flurry with Fed on deck

NEW YORK – US Treasury yields slipped on Tuesday in a choppy session, retreating from earlier highs after a flurry of economic data, including a gauge of retail sales as investors braced for the Federal Reserve’s policy statement.

Yields briefly extended gains after the Commerce Department said retail sales rose 0.6% last month, above the estimate of economists polled by Reuters calling for a rise of 0.2% and after an upwardly revised 0.6% advance in July, indicating consumers remain willing to spend.

“There’s this undercurrent of hope out there and it might even be misplaced … where people are thinking maybe we’ll get 50 (basis points) tomorrow and maybe the Fed’s going to be incrementally more dovish than we think, and oh wait, there’s some retail sales, the economy is still pretty good,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.

“To me as an investor, that’s what I want to see. I want to see a Fed that is lowering rates in a measured way because they can afford to as opposed to having to cut 50 because they have to.”

Other data from the Labor Department showed import prices increased 0.3% last month, topping expectations calling for a decline of 0.1%, after a downwardly revised 0.2% rebound in July, hinting that domestic inflation could heat up in the coming months.

The yield on the benchmark US 10-year Treasury note fell 0.6 basis point to 4.028% after rising to a session high of 4.064% after the data.

The Fed will make its policy announcement on Wednesday, and the market has fully priced in a rate cut of at least 25 basis points, with a roughly 4% chance for an outsized 50 basis-point cut, according to CME’s FedWatch Tool.

A federal appeals court in Washington said on Monday that Governor Lisa Cook could remain in her job while litigation over President Donald Trump’s effort to fire her proceeds.

The US Senate confirmed Stephen Miran, currently on leave as the head of the White House’s Council of Economic Advisers, to an open seat on the central bank’s seven-member Board of Governors as Trump attempts to reshape the composition of the Fed.

The yield on the 30-year bond shed 0.9 basis point to 4.646%.

An auction of USD 13 billion in 20-year bonds by the Treasury was seen as solid by analysts, with demand for the debt at 2.74 times the bonds on sale.

The two-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, fell 2.5 basis points to 3.51% after earlier climbing to 3.578%.

The breakeven rate on five-year US Treasury Inflation-Protected Securities was last at 2.447% after closing at 2.443% on Monday.

The 10-year TIPS breakeven rate was last at 2.371%, indicating the market sees inflation averaging about 2.4% a year for the next decade.

(Reporting by Chuck Mikolajczak in New York; Editing by Matthew Lewis and Nia Williams)

Fed-fueled frenzy sends gold to uncharted territory above USD 3,700

Gold vaulted past USD 3,700 an ounce levels for the first time on Tuesday as rising bets on a rate cut by the Federal Reserve this week fueled a rally that has been stoked by safe-haven demand, central bank buying, and a weaker dollar.

Spot gold rose 0.3% to USD 3,690.59 per ounce, as of 10:49 am ET (1449 GMT), after hitting a record high of USD 3,702.95 earlier in the session. US gold futures for December delivery rose 0.2% to USD 3,727.50.

“Global growth uncertainty and geopolitical risk continue to keep haven demand high but the gold rally is being driven largely by anticipation of aggressive rate cuts from the Federal Reserve,” said Zain Vawda, analyst at MarketPulse by OANDA.

Traders are pricing in a near-certain 25-basis-point rate cut at the end of the two-day meeting on September 17, with a small chance of a 50-bp reduction, per the CME FedWatch tool.

US President Donald Trump, in a social media post on Monday, called for Fed Chair Powell to enact a “bigger” rate cut.

Non-yielding bullion tends to do well in a low interest rate environment.

The dollar fell to a more than two-month low against rivals. A weaker greenback makes gold less expensive for other currency holders.

“Gold is surging on a sharply weaker dollar, which is at lows not seen since July,” said Tai Wong, an independent metals trader.

“Caution may be in the wind, though, ahead of the critical Fed decision tomorrow, so a bit of profit-taking shouldn’t surprise.”

Bullion, renowned as a hedge against uncertainties, has surged about 41% since the start of the year. It breached USD 3,600 per ounce on September 8.

Analysts say the rally has been driven by a potent mix of sustained central bank buying, intensifying safe-haven flows, a global shift away from the US dollar, which is also facing persistent weakness.

Spot gold surged 27% in 2024 and broke the USD 3,000 mark for the first time in March, as uncertainty over Trump’s trade policies drove investors toward the safe-haven asset.

Elsewhere, spot silver was down 0.2% at USD 42.64 per ounce, after hitting its highest level since September 2011 earlier in the session.

Platinum fell 0.5% to USD 1,394.00 and palladium eased 0.5% to USD 1,178.14.

(Reporting by Anushree Mukherjee and Kavya Balaraman in Bengaluru; Editing by Anil D’Silva, Shailesh Kuber, and Nick Zieminski)

Gold scales new high as dollar weakens ahead of Fed meeting

Gold prices scaled a record peak on Tuesday, supported by a weaker dollar ahead of the Federal Reserve’s policy meeting this week, where the central bank is widely expected to cut borrowing rates.

FUNDAMENTALS

* Spot gold rose 0.1% to USD 3,680.17 per ounce as of 0109 GMT, after hitting a record high of USD 3,689.27 earlier in the session.

* US gold futures for December delivery were flat at USD 3,718.80.

* The dollar traded near a 2-1/2-month low against the euro and close to a 10-month trough versus the risk-sensitive Aussie. A weaker greenback makes gold less expensive for other currency holders.

* US President Donald Trump in a social media post on Monday called for Fed Chair Jerome Powell to enact a “bigger” cut to benchmark interest rates.

* Traders are pricing in a near-certain 25-basis-point (bps) rate cut at the end of the two-day meeting on September 17, with a small chance of a 50 bps reduction, per the CME FedWatch tool.

* Lower interest rates reduces the opportunity cost of holding non-yielding bullion.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund (ETF), said its holdings rose 0.21% to 976.80 tonnes on Monday from 974.80 tonnes on Friday.

* Meanwhile on Monday, a US appeals court refused to allow Donald Trump to fire Fed Governor Lisa Cook – the latest step in a legal battle that threatens the Fed’s longstanding independence.

* Elsewhere, spot silver held steady at USD 42.71 per ounce, platinum eased 0.1% to USD 1,399.40 and palladium gained 0.4% to USD 1,188.59.

DATA/EVENTS (GMT)
0430	Japan Tertiary Ind Act NSA Jul
0600	UK Claimant Court Unem Chng Aug
0600	UK ILO Unemployment Rate Jul
0600	UK HMRC Payrolls Change Aug
0900	Germany ZEW Economic Sentiment, Current Conditions Sep
1230	US Import Prices YY, Retail Sales MM Aug
1315	US Industrial Production MM Aug

(Reporting by Brijesh Patel in Bengaluru; Editing by Sumana Nandy)

Oil steady as market weighs supply risk from attacks on Russian refineries

Oil prices held steady in early trade on Tuesday after rising in the previous session, as market participants contemplated potential supply disruption from Russia after Ukrainian drone attacks on its refineries.

Brent crude futures edged up 4 cents to USD 67.48 a barrel by 0000 GMT while US West Texas Intermediate crude was at USD 63.32, up 2 cents. On Monday, Brent settled up 45 cents at USD 67.44 while WTI settled 61 cents higher at USD 63.30.

Ukraine has intensified attacks on Russia’s energy infrastructure in an attempt to impair Moscow’s war capability, as talks to end their conflict have stalled.

“Heightened fears of supply disruptions from Russia, a key producer accounting for over 10% of global oil output” is helping oil prices, IG market analyst Tony Sycamore said in a client note.

US Treasury Secretary Scott Bessent on Monday said the government would not impose additional tariffs on Chinese goods to encourage China to halt purchases of Russian oil unless European countries hit China and India with steep duties of their own.

Investors are also watching out for the US Federal Reserve’s September 16-17 meeting at which the bank is widely expected to cut interest rates. Lower borrowing costs could boost fuel demand.

“A weaker US dollar, driven by expectations of a Federal Reserve rate cut this week, further supported crude oil,” Sycamore said.

The US dollar index, which measures the greenback’s strength against six peers, slipped to a nearly one-week low. A weaker dollar makes oil less expensive for holders of other currencies.

Adding to the risk profile of Middle Eastern oil supply, the Israeli military launched a ground offensive on Monday to occupy Gaza City, Axios reported, citing Israeli officials.

Meanwhile, US and Chinese officials said on Monday they have reached a framework agreement to switch short-video app TikTok to US-controlled ownership in a rare breakthrough in months-long talks.

Previous instances of easing US-China trade tension have boosted risk sentiment and increased oil demand expectations.

(Reporting by Anjana Anil in Bengaluru; Editing by Christopher Cushing)

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