Dollar Rally Keeps Brent Low
With the dollar on a high and worries about a global slowdown still weighing on prices, Brent crude oil began the week on a low note. The commodity traded at $85.49 at 7:10 GMT as investors continued to worry about the growing supply glut and economic uncertainty.
Since the U.S. Federal Reserve decided to finish tapering its bond buying plan at last week's meeting, the U.S. dollar has been on a rally, which in turn has been negative for commodities priced in the greenback.
However, Brent did find some support from encouraging data out of China on Monday, which suggested that the nation's economic struggles could be lightening. CNBC reported that the nation's HSBC/Markit Manufacturing Purchasing Managers’ Index rose to 50.4 in October. The figure came in line with expectations and showed a modest improvement from September's 50.2 reading. Investors were encouraged by the fact that the figure was moving further away from the 50-point mark that separates expansion and contraction.
Though the figure looked promising at face value, some analysts worried about the underlying data, saying that growth in some of China’s key sectors was sluggish. On Saturday, China's official PMI survey showed activity slowing to 50.8 in October from 51.1 in September, proving that the Chinese economy was still under a lot of pressure.
Meanwhile investors continued to watch OPEC members closely as their November 27 meeting approached. Though there have been conflicting sentiments from member nations, most believe that the cartel will not make any cuts to output this year, instead coping with low prices in order to gain market share.
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