The dollar climbed on Tuesday to touch a 6.5-month high against the euro and a seven-month peak against the Swiss franc, propelled by expectations of divergent interest rate moves from the Federal Reserve and European Central Bank. A surprise increase in U.S. wholesale inventories in September and revised upward numbers for August suggested the government's third-quarter economic growth estimate could be increased. Bullish bets on the dollar have grown as an improving economy have bolstered expectations the Fed would raise interest rates at its Dec. 15-16 meeting, as many believe it wants to do.
Oil is unlikely to return to $80 a barrel before the end of 2020 despite unprecedented declines in investment, as yearly demand growth struggles to top 1 million barrels per day (bpd), the International Energy Agency said on Tuesday. In its World Energy Outlook, the IEA said it anticipates demand growth under its central scenario will rise annually by some 900,000 bpd by 2020, gradually reaching demand of 103.5 million bpd by 2040. The drop in crude to around $50 a barrel this year has triggered steep cutbacks in production of U.S. shale oil, one of the major contributors to the oversupply that has stripped 50 percent off the price in the last 12 months.
Gold fell toward a three-month low on Tuesday as the dollar hit a seven-month peak on prospects the U.S. Federal Reserve will raise interest rates in December, while silver and platinum extended losses to multi-week troughs. A forecast-beating U.S. October employment report on Friday pushed up bets the Fed will increase rates for the first time in almost a decade, sending non-interest paying gold to $1,084.90 an ounce, the lowest level since August.