Key Points:
The dollar advances following mixed signals from London.
Oil prices retreat, breaking a winning streak from previous sessions.
Natural gas falls 2.8% due to lower seasonal demand.
The U.S. dollar saw a slight increase at the start of the week, supported by expectations around progress in U.S.-China trade negotiations. The WSJ Dollar Index closed up 0.08% at 95.49, marking its second gain in three days, though it remains 7.07% lower year-to-date. Negotiations in London continue, with no concrete announcements yet, but markets sense some optimism. Traders are also watching macroeconomic indicators, particularly upcoming inflation data and Treasury auctions, which could pressure the dollar.
The DXY index also rose 0.1% to 99.029, down from an intraday high of 99.390.
Oil prices corrected after reaching two-month highs. Futures for crude oil interrupted their recent upward trend, closing lower amid profit-taking and a lack of geopolitical updates. Optimism had been fueled by stalled talks between Ukraine and Russia and no progress with Iran. The EIA projects U.S. production to drop to 13.3 million barrels per day by late 2026, with Brent ending the year at $61 per barrel. WTI closed down 0.5% at $64.98, while Brent fell 0.3% to $66.87.
Natural gas extended its decline due to forecasts of mild weather. The natural gas market fell 2.8% to $3.533 per million BTU, marking its second consecutive drop. Weather forecasts predict unusually mild temperatures, reducing heating needs. This aligns with accelerated inventory accumulation, expected to continue. Despite increased gas use for electricity generation in June, total energy sector consumption will be 3% lower than last summer due to renewable energy growth and higher gas prices.
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