US Oil Inventories fell 5.9 Million barrels but Crude Futures were unable to capitalize on these bullish numbers as USD strengthened Crude Oil closed down -$0.68 ending the New York session at $102.58 per barrel, and Commodities Broadly falling. Weekly Jobless figures released today are expected to show claims seen at 440k and the July Trade Balance is expected to be seen at $-58 Billion. August Import Prices are predicted at -1.8%.
The price of oil is predicted to test the $100 per barrel level despite OPEC`s surprise decision to cut production and once the final output data for July is released some analysts are predicting the effective reduction could be larger than anticipated.
Sterling traded in a fairly tight range yesterday against euro it managed to breaks through the0.800 level Overall the GDP/USD traded with a low of 1.7520 and a high of 1.7679 before closing the day at 1.7530. The debate still rages about UK interest rates with a cut considered necessary to bolster growth but with inflation still an issue this looks unlikely this year. However inflation is expected to slow down before the end of the year so rate cuts may be expected in the 1st quarter 2009.
The Euro rebounded as Lehman Brothers reported heavy losses but was sold heavily late in the day as EU commission downgraded growth forecasts suggesting a technical recession in Germany . The market is eyeing a test of the important 1.40 level, overall the EUR/USD traded with a low of 1.3989 and a high of 1.4179 before closing the day at 1.3990 in the New York session. Looking ahead, August Wholesale Price Index is seen down -0.6%.