Oil prices slumped on Tuesday morning, despite developments around the war in Ukraine prompting concerns about disruption to Russia's supply.
Brent crude (BZ=F) futures fell 1% to $68.07 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) declined 1.2% to $64.01 a barrel.
Read more: Markets dip as Trump says he's ousting Fed governor Cook
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Brent crude oil slipped…this morning, after Monday’s rally, which had lifted prices to a three-week high on fears of supply disruptions from fresh Ukraine drone strikes on Russian energy assets.
“Traders are weighing renewed geopolitical tensions, looming US sanctions on Moscow, and tariffs on India over Russian crude purchases, set to kick in tomorrow.”
Investors are also awaiting the latest US oil inventories data, which is due out on Wednesday.
The pound edged 0.1% higher against the dollar (GBPUSD=X) to trade at $1.3470 at the time of writing on Tuesday morning, boosted by a weaker greenback, as US president Donald Trump escalated his feud with the Federal Reserve.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six currencies, dipped 0.1% to 98.32.
In a letter posted on his platform Truth Social late on Monday, Trump said that was removing Fed governor Lisa Cook from her position “effective immediately”.
“I have determined there is sufficient cause to remove you from your position,” he said.
The president said Cook made conflicting declarations about her primary residence, first claiming a Michigan property would serve as her main home, then signing a separate agreement two weeks later stating the same about a Georgia property. He argued it was “inconceivable” she was unaware of the initial pledge and “impossible” she intended to honour both.
Cook responded and said Trump has no authority to fire her, and she won't quit. Cook’s lawyer, Abbe Lowell, said they plan to take “whatever actions are needed to prevent” Trump’s “illegal action”.
Stock markets fell on Tuesday morning and Treasury yields, which are the rate of return on US government bonds, rose following the news.
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Russ Mould, investment director at AJ Bell (AJB.L), said: “A jump in US Treasury yields indicates that bond investors aren’t happy about how Trump continues to meddle with the Fed and threaten its independence.
“Donald Trump is being relentless in his quest to lower interest rates. He has publicly called for the Federal Reserve to cut the cost of borrowing and has repeating criticised Fed chair Jerome Powell for not pursuing looser monetary policy.
