16.09.2020: USD skidding while oil trading higher (DJIA, USDX, USD/CAD, Brent, BTC/USD)

Futures on the benchmark US stock indexes are gaining ground amid expectations for the Fed’s policy decisions. Meanwhile, the US dollar is extending weakness as market participants are betting on the dovish stance of the Federal Reserve. Oil prices jumped over 2% today as a hurricane closed US offshore oil production and an industry report showed contraction of US oil inventories. Bitcoin is about to hit the mark of 11,000 dollars.
Today futures on the main US stock indexes are extending a steady rally as traders await Fed’s policy update and data on the US retail sales. In the American pre-market, futures on the Dow Jones were 0.51% up at 28,049.5. Likewise, the Nasdaq gained 0.49% to trade at 11,506.88. Futures of the S&P 500 rose 0.59% to trade at 3,414.88. The US stocks are expected to carry on with its rally during the New York trade.
The US dollar slipped in the European trade. Popular currency pairs are trading in narrow ranges as traders are revising their portfolios ahead of the policy decisions of the Federal Reserve. At 06.50 Greenwich meantime, the US dollar index declined 0.1% and settled down at 93.067.
This will be the first policy meeting after Chairman Jerome Powell announced a milder approach to inflation at the symposium in Jackson Hole in late August.
The last change in the Fed’s monetary policy aroused expectations that interest rates would remain low for long. This suggests it would be a good idea to consider short deals on the US dollar in the medium term. So, most analysts say that selling on rallies would be the best strategy. Experts at ING think that a recovery of the greenback in September could hardly change open interest on the US dollar. Indeed, the US dollar has got stuck in the downtrend. The Commitment of Traders Reports show no evidence that speculators are cutting short deals on the dollar.
The weakness of the greenback comes as a result of dovish expectations for the Fed’s rhetoric. Interestingly, on Tuesday the US dollar inched up against its Canadian rival. The pair closed at the level above the intraday high.
Crude oil gained over 2% today with prospects for a further climb. Yesterday, the American Petroleum Institute reported that US crude inventories contracted by 9.52 million barrels last week, although gasoline inventories increased by 3.8 million barrels. November Brent futures were trading at 41 dollars 39 cents a barrel on the London Futures Exchange that is 2.12% up from yesterday’s closing price. October WTI futures were trading at 39 dollars 14 cents a barrel on NYMEX that 2.25% up from yesterday’s closing price. In its fresh outlook, OPEC predicts that the global oil demand will fall 9.5 million barrels per day this year to 90.2 million barrels. The cartel experts downgraded the forecasts both for this year and 2021.
In the meantime, bitcoin surged over 1% today, approaching the level of 11,000 dollars per token. According to CoinMarketCap which estimates its average price collecting data from over 20 trading floors, the bitcoin price increased by 1.61% to 10,913 dollars. The most popular cryptocurrency accounts for 57.8% of the trade volume in the crypto market. However, bitcoin is the only crypto currency which is rising in value while others are falling. This does not signal a steady rally. So, it would be better to play safe. Some analysts warn that the number one digital currency could drop to the recent lows soon.
Today the Federal Reserve is setting the tone. Traders are anticipating a press conference of Jerome Powell. As for the economic calendar, traders are braced for weak retail in the US in August.

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