Dollar backs off all-time low, gold consolidates

FE Team | Published: October 31, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

SINGAPORE (Agencies): Crude oil prices eased back Tuesday after hitting a record above $93 a barrel in the previous session while the dollar moved up against the euro Tuesday, back from its all-time low set a day before. Gold consolidated within striking distance of the key $800 level as traders looked forward to the start of the October interest rate setting meeting of the Federal Reserve.
Oil prices dropped Tuesday from a fresh record set overnight as Mexico's state oil company said it will resume production and a survey forecast rising US stockpiles.
Petroleos Mexicanos will today pump 600,000 barrels a day of output that was halted two days ago by storms in the Gulf of Mexico, spokesman Carlos Rameriez said.
Oil supplies in the US probably gained last week, a Bloomberg News survey showed.
Light, sweet crude for December delivery fell 76 cents to $92.77 a barrel in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore.
The contract rose $1.67 to settle at a record $93.53 a barrel Monday, after climbing as high as $93.80, a trading record.
Meanwhile the dollar rose against the euro on Tuesday, crawling back from its all-time low set a day before even as markets anticipated a likely quarter-percent rate cut by the US Federal Reserve Bank this week.
The 13-nation euro bought $1.4383 in early morning European trading, down from the $1.4424 in late trading in New York Monday.
It was also off its all-time high of $1.4438 against the greenback Monday.
Markets expect the Fed to cut interest rates from their current level of 4.75 per cent Wednesday - adding to an unexpectedly bold half-point cut last month.
Although lower interest rates can jump-start the economy, they can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns. Higher rates can boost a currency.
On Tuesday, the British pound bought $2.0575, down from $2.0619, its highest point since July, on Monday.