The US Dollar Index hit a 3 year high in trading on Wednesday, clocking up 84.940 in early hours as investors once again run for cover to the greenback however crude oil prices are still rising in tandem as Egyptian tensions continue to fuel supply concerns.
Latest Dollar Index Rate
The ICE US Dollar Index, which tracks the dollar against a basket of major world currencies was trading at 84.700, 06:47 GMT this morning on the ICE Futures Exchange.
More Dollar Strength To Come?
The most recent CFTC data showed long dollar positioning building into the end of the second quarter, but still below the peak seen in May, suggesting further upside for the greenback. The value of net long positions in the dollar jumped to $22.37 billion in the week ended July 2 from $13.28 billion the previous week.
“This is momentum-driven trade and we are looking for more dollar strength,” said Mankash Jain, head of FX and Investment Management at Solo Capital.
Oil Prices Still Rising
Brent crude oil futures hit $108 this morning and US WTI Light crude passed through $104 a barrel as the latest oil inventory data out of the US once again showed big declines. Meanwhile, Egypt is still in the spotlight as traders remain concerned about crude oil supply which passes through the Suze Canal.
Late on Tuesday the US API (American Petroleum Institute) reported that American crude oil supplies fell 9 million barrels for the week ended July 5. A Platts survey of analysts had projected a decline of 3.8 million barrels.
“This is a big shock. While most were looking at another drawdown in supply, no one expected this drop.” said Price Futures Group senior market analyst Phil Flynn.
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US Dollar Index hits a 3 year high but oil prices are still rising
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