NEW YORK, April 22 — The US dollar edged lower against a basket of currencies in thin holiday-impacted trading yesterday, while a jump in the price of oil on news Washington plans to tighten a clampdown on Iranian oil exports in May boosted the Canadian dollar and the Russian ruble.
The US dollar index, which measures the greenback against six major currencies, was 0.2 per cent lower at 97.283. The index hit a two-week high of 97.485 late last week.
Against the Japanese yen the US dollar was about flat, while the euro was 0.11 per cent higher against the greenback.
Financial markets in Australia, Hong Kong and many major countries in Europe were closed yesterday for the Easter holiday. Currency trading continued globally but volume was expected to be light.
“With much of the market still out on Easter and Passover related holidays there is not a whole lot to chew on to start the week,” said Brad Bechtel, global head of FX at Jefferies, in New York.
The US dollar found little support from data that showed US home sales fell more than expected in March amid supply constraints.
The greenback has firmed in recent weeks on the back of a gradual rise in US 10-year Treasury yields and signs of strength in the world's top economy, including better-than-expected retail sales in March, following a weak start to the year.
Traders will be keenly watching the US GDP report due Friday for further clues on the health of the US economy, analysts said.
Yesterday, crude oil prices were the biggest driving force in currency markets, analysts said.
Oil prices jumped 3 per cent to a near six-month high on growing concern about tight global supplies after Washington said it will eliminate in May all waivers allowing eight economies to buy Iranian oil without facing US sanctions.
With the jump in the price of oil, one of Canada’s major exports, the Canadian dollar rose 0.4 per cent against its US counterpart.
The ruble hit its highest level against the euro in more than a year, and a one month-peak versus the dollar, driven by the jump in oil and local month-end taxes that boost demand for the Russian currency.
Sterling was a shade lower at 1.2981, dipping below the US$1.30 handle and nearly 0.4 per cent off a two-month low of US$1.2945 hit last month. The currency is now at its least volatile in years as investors await a breakthrough in Britain's European Union divorce process. — Reuters
