Dollar gains ground, oil pauses the rally

The dollar gained ground on Wednesday, cutting yesterday's losses near its one-week low. Safe-haven assets are losing favour as economy-dimming COVID-19 worries fade.

In the current market environment, some investors believe the ongoing COVID-19 spread reduces the chances that the Fed will announce a timeline for both asset tapering and interest rate hikes at its annual symposium later this week.

The Fed will likely wait until it sees absolute decisive payroll figures before announcing asset taper this year.

After a broadly positive overnight session on Wall Street, Asian stock markets mostly edged higher on Wednesday with another rally in crude oil prices, the positive U.S. vaccination news, and eased worries about an imminent tapering of stimulus by the U.S. Federal Reserve, helping to raise hopes of stronger global growth.

Among the major averages, both the S&P 500 and the Nasdaq set new record highs. The Dow turned in a mixed performance on the day, failing to hold early gains.

During August, the STOXX 600 experienced its greatest run of gains in almost 15 years, bolstered by stronger-than-expected earnings during the second quarter and improving economic data in Europe.

Oil steadied after a strong rally this week fuelled by a loss of around a quarter of Mexico's production and signs that China, the world's biggest importer, has curbed an outbreak of Coronavirus. In the two days preceding the rally, both benchmark contracts gained about 8%, erasing most of the loss from a seven-day losing streak.

Supply data from the U.S. Energy Information Administration is due later in the day, which is expected the U.S. inventories have fallen by 2.683 M barrels last week.

Business confidence data from Germany is due on Wednesday.

Also, Germany's Ifo Business Climate indicator for August and France's Unemployment Benefit Claims number for July will be released today.