The US dollar slipped again in early European trading on Thursday. Meanwhile, the euro actually strengthened against the greenback ahead of the European Central Bank policy meeting. The Dollar Index, which tracks the greenback against six other currencies, was down 0.2% at 93.090.
On the other hand, the EUR/ USD currency was up 0.2% to 1.1829. The euro has been pushed to increase. It was helped by Bloomberg News reporting that ECB officials are growing more confident in the bloc's economic outlook in the market.
However, EUR/USD remains well below the 1.20 level. It was touched last week before European Central Bank chief economist Philip Lane's comments that the exchange rate is 'important' to monetary policy. In the other side, the oil price is increasing.
ECB Meetings will be Highlighted
With this in mind, traders will follow the ECB meeting closely. While a change in interest rate policy is unlikely, Lane's statement showed officials are increasingly uncomfortable with the euro appreciating nearly 6% against the dollar from its June low condition.
The Financial Times reports that the ECB intends to include a sentence about exchange rates in the introductory statement at the start of Christine Lagarde's press conference. However, they also provide a few other details. The ECB is under pressure again after eurozone consumer prices turned negative.
It happened in August for the first time since 2016, and the US Federal Reserve changed its monetary policy strategy in such a way as to weaken the dollar further. Despite the challenging economic outlook, many think that the ECB will maintain its monetary policy stance.
Legal Actions for the UK
However, it tends to convey an explicitly dovish tone. It is mainly aimed at lowering the EUR. They think that further stimulus could come in December or later. Elsewhere, GBP/USD rose 0.2% to 1.3022, recovering from losses to a six-week low of $ 1.2839 on Wednesday.
However, EUR/GBP rose 0.1% to 0.9085, approaching a six-week high. The European Union is now studying possible legal action against the UK. This consideration arises of Prime Minister Boris Johnson's plans to violate the 'Withdrawal Agreement'. That forms the basis of talks about future trade.
That future trade is more to relations between the two parties in the world trading market. It increases the chances of Britain exiting the EU single market within four months without a trade agreement. The negotiators will meet again on Thursday.
On the other side, while strong Middle Eastern producers are willing to sell at lower prices, it's only natural for global markets to panic. It is what a senior oil market analyst at Rystad Energy said. The global health crisis continues to flare with coronavirus cases.
Oil Price is Increasing by About 3%
Oil futures rebounded from some of the losses they had in the previous session. However, a rebound in COVID-19 cases in several countries undermined hopes for a steady recovery in global demand. Brent crude was up $ 1.21, or 3%, to $ 40.99 a barrel.
The benchmark fell more than 5% on Tuesday to fall below $ 40 a barrel for the first time since June. US crude remained at $ 1.29, or 3.5%. It is higher at $ 38.05 a barrel, after falling nearly 8% in the previous session.
This situation becomes the main measure of the lowest level in three months. Prices fell this week after Saudi Arabian state oil company Aramco cut its official October selling price for its Arab light oil. Many people think that this is a sign of weak demand.
Those cases are rising in India, Great Britain, Spain, and parts of the United States. US crude production is expected to fall 870,000 barrels per day to 11.38 million barrels per day this year. It was a less sharp decline than previously thought.
