The United States dollar appears to have halted its decline. It was happened as market participants turned to repositioning after United States Gross Domestic Product data showed higher-than-expected gains.

That US GDP was rising to 2.9%. Meanwhile, the United States Durable Goods Orders, weekly Jobless Claims, and Core Personal Consumption Expenditures are reported in parallel.

However, the American growth figures are likely to stand out amid the threat of a potential U.S. recession. A string of recent dismal American economic data has reignited concerns over the health of the US economy.

Those data are included the including Retail Sales, Industrial Production and Manufacturing IMP. The situation above also brings several changes.

American GDP had an Impact on Risk Sentiment 

One of the changes is raising expectations of a smaller rate hike from the U.S. Federal Reserve in its upcoming policy meeting. America’s Gross Domestic Product data is likely to have a significant impact on risk sentiment.

That thing will ultimately affect the valuation of the US Dollar. Market participants will reassess the Federal Reserve's policy expectations.

That is in the face of the US economic outlook in the coming year. Elsewhere, Oil prices rose 1% amid expectations that demand would strengthen as China's main oil importers reopened their economies.

It was also caused by the news of U.S. crude inventories which increased less than expected. Brent crude futures rose by 78 cents, or 0.9%, to $86.90 a barrel. 

Beijing Opens it’s Border

Elsewhere, the United States West Texas Intermediate (WTI) crude futures rose by 75 cents. It means that this commodity is 0.9% higher to $80.90.

China's reopening supports the demand outlook as it was said by UBS analyst Giovanni Staunovo. Also, market participants are closely tracking the upcoming OPEC+ JMMC meeting and the EU embargo on refined products.

China has eased their strict COVID-19 restrictions this month. It can be seen from Beijing which is reopening its borders for the first time in three years.

Meanwhile, the US crude inventories edged up by 533,000 barrels to 448.5 million barrels in the week ended Jan. 20. That was informed by the Energy Information Administration (EIA).

Crude Oil Has Rallied This Year

That's quite far from the expected 1 million-barrel gain, though the EIA said crude stockpiles were at their highest level since June 2021. That is why; market participants decided to be more careful. 

The OPEC+ ministerial panel meeting on February 1 is likely to support the current production levels of the oil producer group as OPEC+ sources Informed lately. 

Before, oil stabilized after a decline in the previous session. It was as rising U.S. crude inventories and fears of a global recession offset optimism of a demand recovery in China.

Crude has rallied in 2023. It can be seen from global benchmark Brent crude which is hitting $89 a barrel this week for the first time since early December at the end of China's COVID-19 controls.

US rate Hike may Ease Soon 

The situation above is a sign of hopes that a United States rate hike will soon ease. Also weighing on oil prices were reports that American crude stockpiles rose by about 3.4 million barrels.

That data was shared by market sources citing American Petroleum Institute figures. Besides that, concerns about an economic slowdown is also a reason that weight on this commodity. 

U.S. business activity contracted in January for the seventh month in a row. Elsewhere, the USD rose in quiet trading as market participants looked toward the Federal Reserve's policy decision next wee.

Meanwhile, the euro traded just below its nine-month high. The euro was 0.26% lower against the dollar at $1,086. It was down from $1,093 reached on Friday, the highest level since early May.