FOREX-Dollar edges lower as oil price gain boosts commodity currencies

By Reuters / January 01, 1970 / in.investing.com / Article Link

* U.S. dollar falls as Euro strengthens

* Commodities rally supports Canadian, Australian dollars

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh

By Tommy Wilkes

LONDON, Dec 27 (Reuters) - The dollar eased against a basket of currencies and fell against the euro on Wednesday in thin holiday trading, while a rally in commodity prices helped push the Canadian and Australian dollars to their highest levels in two months.

Traders said there was little news to support the euro's rise, but some investors have positioned for a possible strengthening in the single currency into the new year following a stellar 2017 in which the euro had its best year against the greenback since 2003.

Sterling markets were quiet, with the pound up 0.1 percent at $1.338. GBP=D3

Oil prices had surged to 2-1/2 year highs on Tuesday, boosted by news of an explosion on a Libyan crude pipeline as well as voluntary OPEC-led supply cuts. Copper prices on Wednesday rocketed to their highest in three and a half years. helped support demand for the currencies of commodity exporting countries, with the Canadian dollar touching C$1.2659 CAD=D3 , its highest level since October.

Similarly, the Australian dollar AUD=D3 rose 0.4 percent to $0.7762, reaching its highest level in two months.

The U.S. dollar eased 0.1 percent against a basket of major currencies to 93.193. .DXY

The U.S. dollar was also down 0.1 percent versus the euro at $1.187 EUR=EBS

"There are very few events to drive anything today," said Christin Tuxen, an FX strategist at Danske Bank, adding that the passage of the U.S. government's landmark tax reform last week was not helping the dollar. "For most people it's not going to be this dollar-supportive event."

Tuxen said that euro U.S. dollar trading in December had been driven by volatility in the Euro/dollar cross-currency basis swaps, which widened significantly earlier this month as demand for dollars jumped. policy convergence could weigh on the dollar next year, now that central banks other than the U.S. Federal Reserve have either begun moving away from monetary stimulus, or started to raise interest rates, said Peter Chia, FX strategist for United Overseas Bank in Singapore.

Against this backdrop, Japanese policymakers may at least start dropping more hints about an eventual tightening of the Bank of Japan's monetary policy, Chia said, adding that the dollar could slip to 108 yen by the end of March.

"I think that policymakers in Japan want to prepare markets way ahead for some policy change ... The signalling process could be on a higher intensity next year," he said, adding that actual BOJ policy tightening might occur only in 2019.

The dollar held steady against the yen at 113.19 yen. JPY=

Bitcoin rose 2.28 percent to about $16,124 BTC=BTSP on the Luxembourg-based Bitstamp exchange, putting it about 14 percent up this week, after last week suffering its biggest weekly drop since 2013.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

Recent News

Gold stocks down along with broad equities decline

November 04, 2024 / www.canadianminingreport.com

Big Gold still undervalued overall versus Big Tech

November 04, 2024 / www.canadianminingreport.com

Junior gold stocks outperform in sector pullback

October 28, 2024 / canadianminingreport.com

Global mining M&A on track for similar levels to 2023

October 28, 2024 / www.canadianminingreport.com

Gold ETF inflows at four-year highs

October 21, 2024 / www.canadianminingreport.com
See all >
Share to Youtube Share to Facebook Facebook Share to Linkedin Share to Twitter Twitter Share to Tiktok