Oil prices were slightly higher on Tuesday morning as a weak dollar sent traders towards commodities instead of currency trading. Brent crude futures gained 20 cents during Tuesday’s Asian session to trade at $50.95 per barrel while U.S. WTI crude futures traded at $47.97 per barrel, a 24 cent gain per barrel. Nevertheless, gains were capped by continuing fears that U.S. production increases are undermining OPEC’s production cuts and preventing prices from stabilizing as planned.
The dollar index has eased 2.9 percent since hitting peaks in early March as U.S. President Donald Trump has shown that he will not be able to implement his proposals as quickly or easily as he claimed.
Asian stocks traded higher on Tuesday as the dollar rebounded slightly from four-month-lows hit on Monday, with Japan’s Nikkei 225 spurring the gains with a 1 percent climb, its biggest one-day gain in more than two weeks. Australian stocks gained 1.1 percent and Hong Kong’s Hang Seng index rose 0.6 percent.
Currencies Trade Nearly Flat
The dollar index traded at 99.23 .DXY on Tuesday morning, up slightly after hitting four-month-lows on Monday. The euro remained steady at $1.0861 and the dollar remained fairly stable against the yen as well, trading 0.1 percent lower at 110.605 yen after hitting 110.110 overnight, a level not seen since mid-November. The pound gained 0.1 percent on Tuesday morning after rising nearly 1 percent overnight. The sterling traded at $1.2568 on Tuesday.
Though traders remain largely biased against the dollar, some reasons for optimism remain, including the fact that Republicans will be required to implement some of their fiscal stimulus plans in order to remain strong for next year’s November election and to maintain their control in Congress. This drive may help the party pull together to get things done more efficiently than it has since Trump took office in January.