Oil Hits $50 Per Barrel, Uplifts Global Equities

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The U.S. dollar (CURRENCY:USD) had a breather today as traders covered positions ahead of key events that might hold potential implications for the currency. In Asian trade, USD/JPY (USDJPY) dipped 0.15% to 110.01. Among the significant factors that could alter dollar trajectory is an upcoming speech by Federal Reserve chief Janet Yellen tomorrow.

Key events to watch

Alongside this, the impending decision over a sales tax hike in Japan is also a cause of concern for traders. In other global currencies, both EUR/USD (EURUSD) and GBP/USD (GBPUSD) surged against greenback. Euro advanced 0.18% to 1.1173 while Sterling added 0.20% to 1.4722.

Global equities are buoyant, driven by renewed buying interest in energy shares following a robust rally in oil prices. Also, improved prospects of European banks added to the market’s optimism. Except for the Taiwan TSEC 50 Index, the rest of Asia posted gains. India’s S&P BSE Sensex (INDEXBOM:SENSEX) surged the most, adding 1.28% to 26,212.54. However, Japanese Prime Minister Shinzo Abe warned during the G7 meeting that they are staring at a Lehman Brothers form of crisis that could disrupt the equity outlook.

European stocks opened broadly higher, continuing their previous day’s rally. Another Greek debt deal alongside a substantial fall in oil production lent support to bourses. Germany’s DAX (INDEXDB:DAX) surged 0.44% to 10,250.29 while Euronext 100 (INDEXEURO:N100) added 0.21% to 883.18.

Oil reclaims six-month highs

A BBC report highlighted that the Brent Crude price touched $50.07 for the first time this year following a drastic fall in U.S. crude oil inventories. US Department of Energy data revealed yesterday that U.S. crude stockpiles plunged 4.2 million barrels to 537.1 million barrels during the week ended on May 20, 2016. A bigger-than-expected fall in oil inventories coupled with recent oil disruptions supported prices to recover from 13-year lows around $26.

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