Crude oil prints 6-month highs following pipeline deal

Excon Fuji Securities report that Crude oil futures held steady around USD 100 a barrel awaiting the announcement of the Italian bond auction later in the day. Preliminary data indicated that Japan's economy increased by 1.5%, well above expectations, which provided support for Crude prices.

According to New York Mercantile Exchange, futures of light sweet crude for delivery in December traded at USD 91.35 a barrel declining 1.97%. Brent oil futures for December delivery traded at USD 107.76 a barrel with a pullback 1.63%.

Meanwhile, the dollar index kept increasing for a second day, gaining 0.75% to trade at a seven-day high of 77.24. Oil prices typically pull back when the USD strengthens as it becomes costly for investors using other currencies.

Crude futures continued its losing streak after official data indicated that China's purchasing managers' index dropped from 51.2 to 50.4.

Crude oil futures found support on November 16^th, as the expectations that the European Central Bank was buying Spanish and Italian government debt rose market sentiment. The prices found support after the announcement of the U.S. Department of Labor stated the consumer price index fell 0.1% in October. Analysts expected that the CPI metric to hold steady last month after rising 0.3% in September.

Back on Tuesday, Crude oil futures jumped for the second day rallying to a six-month high after news of the reversal of a key U.S. oil pipeline raised the hopes that the supply in the United States will be decreased. By the end of the month, according to the ICE Futures Exchange data, Brent oil futures for January delivery traded at USD 107.86 a barrel increasing 0.8%.

EUR/USD advances to a fresh monthly high

Excon Fuji Securities saw the EUR/USD price activity picked up today with the pair trading between 1.3303 and 1.3385 gaining 0.0054 or 0.42%.

As per the Speculative Sentiment Index (SSI) for the EUR/USD, the reading is currently -1.89 compared to -2.4 last week. Despite this significantly negative number, the current price action may suggest a change in market conditions in the near future.

The euro gained ground against the dollar in the last week and managed to close above 1.3500, while ended the yesterday’s trades below this crucial near-term support.

Euro gains were boosted by better-than-expected economic data after the ZEW index rose to 21.5 in April, well above the expected reading of 14.0.

Markets sentiments improved in the last few days buoyed by the on-going rebound in oil prices and the latest positive economic data coming from China, tempering concerns towards a global economic slowdown.

On Tuesday morning, the U.S. Census Bureau reported that building permits declined 7.7% to 1.086 million, extending losses of 2.2% over February. Meanwhile, housing starts dropped drastically by 8.8% last month to 1.089 million, well below analysts' expectations of a rise to 1.167 million.

Due to these disappointing readings, the U.S. Dollar Index lost more than 0.50% to reach 93.89, before rebounding to hit 94.07. The USD pushed lower ahead of Wall Street opening dropping more than predicted in March.

On the other hand, the GBP/USD pair traded at fresh monthly highs, and is expected to continue climbing to break above 1.5405. The GBP price also ticked higher due to the high-yielders demand.

Oil traded volatilely due to dollar weakness

Excon Fuji Securities found oil as it inched up slightly on Thursday recovering from last session’s 5 percent plunge as the dollar continued slipping which largely encourage traders to buy riskier assets.

 Lower USD prices make the dollar-denominated commodity cheaper for investors holding other currencies, and less attractive for traders seeking higher returns.

Previously, prices fell under pressure after the International Energy Agency lowered its global demand expectations.

Oil prices have been volatile since reaching a 30-month high at $115 on May 2nd. The Chicago Mercantile Exchange tried to control "speculation" in oil by requiring a 25 percent margin on oil futures contracts.

In London, Brent crude for June delivery scored 41 cents higher at $112.98 a barrel, jumping from a low of $110.15.

Oil futures took a steep slip on Wednesday, after the U.S. Energy Information Administration data stated that gasoline demand eased up 2.4% last week, which is the largest decline in seven consecutive weeks. On the other hand, oil supplies increased last week by 3.8 million barrels, twice as much as what analysts predicted.

U.S. June crude increased 76 cents climbing up to hit $98.97 a barrel, while U.S. gasoline futures lost 5.89 cents to $3.0639 a gallon, after shedding 26 cents on Wednesday.

According to Greg Daco, senior economist at IHS Global Insight, imports prices have jumped up over the past several months due to the higher costs of oil.

"What we're seeing right now is higher oil prices and higher commodity prices, and producers have to make a tough decision, either reducing their margin and taking the brunt of the hit or passing on those higher costs and risk having lower demand", Daco noted.