FX round-up: Dollar on back foot as oil extends advance
Risk-on was the name of the game on Tuesday as crude oil and commodity futures extended Monday’s bounce, putting the US dollar on the back-foot.
As of 15:50 BST euro/dollar was higher by 0.44% to 1.1362, while cable was bouncing back by 0.75% to 1.4385 in tandem with a 0.54% move higher in dollar/yen to 109.41
The Greenback was especially weak versus the commodity currencies, such as the Loonie, the Aussie or the Kiwi, nursing losses of approximately 1.0% against all of those.
Overall, the US dollar spot index was retreating 0.47% to 94.04.
Acting as a backdrop, in remarks to the House of Lords’s Economic Affairs Committee Bank of England governor Mark Carney adopted a rather non-committal stance when asked about the accuracy of the Treasury’s analysis, published on the previous day, of the potential costs of Brexit.
Nevertheless, the subject was not far from markets’ minds.
In that regard, the ZEW Institute’s index of German economic confidence improved from a reading of 4.3 for March to 11.2 for April (consensus: 8.0).
However, Professor Sascha Steffen, Head of the Research Department at ZEW said: “On balance, however, the continued poor growth in China and other important emerging markets continues to be a burden for the German export industry. Furthermore, concern about Great Britain’s possible exit from the EU seems to be having a negative impact.”
The US dollar was also sharply lower against Brazil’s real, losing 1.87% of its value to 3.5483.
Against another fellow BRIC, the Russian ruble, the dollar was off by 0.995 to 65.57