Speculations that US interest rates would continue to rise sharply gave the dollar a tailwind on Thursday. The dollar index rose as much as 0.8 percent to 109.68 points, hitting a 20-year high. In return, the euro depreciated, losing 1.2 percent to $0.9939. Despite fears of a recession in the US, currency watchdog Loretta Mester does not expect any interest rate cuts in the coming year. Instead, the chair of the Cleveland Fed District assumes that interest rates will rise to more than four percent by early 2023 in the fight against inflation and remain at this level thereafter.
Fears of lower demand dominated sentiment on the commodity market. Brent crude oil from the North Sea fell 3.1 percent to $92.66 a barrel (159 liters) and copper fell 1.9 percent to $7,653 a ton. Crude oil prices received some support from the tight supply situation that has existed for some time. In addition, several member states of the Opec+ oil association have signaled that they will reduce their supply if oil prices continue to fall. Corresponding statements came from Saudi Arabia, one of the largest oil producers in the world.
In parallel, natural gas moved further away from its recent record high. Due to calming gas storage levels and the discussion about a price cap for energy in the EU, prices fell at times by almost six percent to 223 euros per megawatt hour, after having dropped significantly the day before. Even the “anti-crisis currency” gold could not completely escape the downward trend and lost one percent to $1,693 per troy ounce (31.1 grams). The precious metal is suffering from the strength of the world’s leading currency, which makes gold less attractive for investors outside the US, said independent analyst Ross Norman.