US Dollar Index rebounds off a weaker euro, crude oil prices follow lower

4 February 2013 4 February 2013

LorieFuller31

After several days of gains, the euro has given up it’s recent rally making way for the US dollar Index to move higher today (currently 79.52 at 12:17 GMT – from 79.2) whilst crude oil prices are following the euro zone currency lower with Brent 0.7 percent and WTI 0.8 percent off Friday’s closing price.

Weaker Euro

Market sentiment was hit again this morning by fresh concerns over the euro zone as an escalating political crisis in Spain pushed the country’s borrowing costs higher. The euro has weakened partly due to Spanish yields jumping in the past hour to 5.42% from 5.31% as worries about the Spanish government circulate and mount. During the last week, the euro advanced more than 1.4% against the US dollar and finished on Friday at a price of $1.3655.

Europe’s export driven funding nations that underwrite the EU, especially the EU’s paymaster Germany, may start screaming to end the rising strength of the euro given the pressure the euro’s rise is placing on exports.

This weeks big watch will be for moves in USD/EUR after the ECB rate decision and ECB press conference this coming Thursday.

Crude Oil Prices

At 12:30 GMT today ICE Brent oil futures for March 2013 delivery were trading at $116.04 a barrel on the ICE Futures Exchange, while US NYMEX WTI is currently $96.83 a barrel.