Oil prices have reached a three-month high, fueled by strong US economic data and increased sanctions affecting Russian oil exports. The market’s optimism has shifted the timeline for anticipated Federal Reserve rate cuts, now expected no earlier than July 2025. Technical analysis suggests oil prices may continue their upward trajectory despite being currently overbought due to the constrained Russian supply.
In currency markets, the focus is on the USD/CNH pair as China’s efforts to stabilize the yuan against soft economic performances include halting open market government bond purchases. However, the yuan faces pressure, with the USD/CNH pair testing key resistance levels, indicative of potential further softening.
This recent surge in oil prices and the forex focus on the USD/CNH pair highlight the complex interdependence between global economic developments, central bank interventions, and market dynamics in commodities and currencies.
