The current geopolitical conflicts were reflected again on the commodity markets on Wednesday. Tensions between Russia and the West over the Ukraine conflict fueled speculation that oil markets would tighten and pushed prices higher. Brent North Sea oil rose 2 percent to $89.93 a barrel. The US variety WTI cost 87.67 dollars, 2.4 percent more. US President Joe Biden had threatened severe sanctions in the event of a Russian invasion of Ukraine and also described punitive measures against Russian President Vladimir Putin as conceivable. According to traders, the conflict in Yemen between the regional powers of Sunni Saudi Arabia and Shiite Iran is also fueling oil prices.
The prospect of interest rate hikes by the US Federal Reserve soon gave the dollar a boost. In return, the euro increased its losses in the evening and was 0.4 percent lower at $ 1.1254. In view of the high inflation, the US Federal Reserve wants to raise interest rates soon and then reduce its bloated balance sheet. After Wednesday’s monetary policy meeting, she said it would soon be appropriate to raise interest rates. For the time being, she left it in the range from zero to 0.25 percent. Analysts are already expecting the first interest rate hike since the start of the corona pandemic at the next meeting in March. Fed Chair Jerome Powell is worried about stubbornly high inflation and has signaled an end to the loose stance. Investors shed gold and Treasuries following the Fed’s announcement. The price of a troy ounce of the precious metal fell by 1.6 percent to $1,818 per troy ounce. The yield on ten-year US bonds rose accordingly up to 1.857 percent, after 1.785 percent the previous day.