A brief look at the oil and forex markets.
Crude oil prices fell sharply on Monday on growing concern that the global economic recovery will stall. Oil traded at a six-week on fears that a prolonged economic slump will reduce demand for fuel.
US light crude oil for August delivery fell $2.68 to settle at $64.05 a barrel on the New York Mercantile Exchange.A fresh batch of nerves among traders was prompted last week by a surprisingly bad US jobless report. Otherwise oil trading has been thin on the ground following the extended weekend break for the US Independence Day weekend.
Comments from Vice President Joe Biden in a weekend interview also added to market jitters. He said US officials "misread how bad the economy was," when the stimulus plan was put together at the start of this year.
Among precious metals COMEX gold for August delivery settled down $6.70 at $924.30 an ounce as demand for the precious metal as a hedge against inflation waned. The stronger dollar also weighed on demand for oil and gold.
September palladium fell $9.35 to $242.65 an ounce while September silver slid 17 cents to $13.238 an ounce.
Dollar loses initial gains, yen rises
The dollar hit a two-week high against the euro before retreating as Wall Street staged a late rally, sparking last minute interest in riskier currencies.
Demand for the greenback had been strong earlier in Monday’s session as investors fretted about last week’s grim US job figures, prompting fears about an economic recovery.
However as risk appetite returned late in the session and speculation that the dollar’s role as the world’s reserve currency would be scrutinised at the G-8 meeting in Italy on Wednesday, the US currency weakened.
The dollar index, which measures the US currency against six others, fell to 80.327 from 80.519 late Friday.
While the dollar lost initial gains, the yen’s appeal as a safe haven investment remained throughout the day. The dollar fell 0.8% to 95.30 yen after slumping to a low of 94.66 yen.
Sterling fell to a low of $1.6094 ahead of the Bank of England’s policy meeting on Thursday. While interest rates are expected to remain unchanged, traders are expecting the announcement of a further £25bn injection to the quantitative easing programme.
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