The euro moved little on Monday and was able to hold on to the gains on Friday. In the evening, the common currency was traded just under $ 1.18, roughly the same level as on Friday evening. On Friday, a weak dollar had given the euro a significant boost. The exchange rate had risen about half a cent after the consumer climate in the US had surprisingly and significantly clouded over in August.
The fear of slackening demand in China, the world’s largest oil importer, weighed on oil prices. The prices of the most important types Brent and WTI fell by around three percent at times. Investors fear stagnating demand in the People’s Republic because of government measures against the spread of the Delta variant. “The recently increased virus infections and containment measures by politics are taking their toll,” wrote Commerzbank economists Hao Zhou and Marco Wagner. For example, factories and ports had to be temporarily closed due to new corona outbreaks. In addition, there were heavy floods and heavy rains, for example in the economically important province of Henan. This exacerbates existing delivery bottlenecks and drives up costs. China’s refineries cut production amid high inventory levels and declining profits, with crude oil processing falling to its lowest level since May 2020 in July.
Investors hoped that the minutes of the July meeting of the US Federal Reserve this week would provide further information on global economic development and further support from the central banks. Investors also kept an eye on the uncertainties arising from the collapse of the Afghan government.