USD Rate Settles After Oil Rebound Calms Nerves

  • Dollar index down 0.13%
  • USD sees small retreat after 2-week high yesterday
  • Safe-haven currencies remain largely supported

USD edged lower on Wednesday, negating some of the previous day’s gains, but safe-haven currencies remained largely well supported as markets began to stabilize as oil prices recovered from another slump. Brent crude oil fell below $16 a barrel to its lowest since 1999 on Wednesday.

Current USD to  GBP rate: 0.9391 GBP

Current USD to  EUR rate: 1.0470 EUR

Current USD to  CHF rate: 0.9950 CHF

Bjørnar Tonhaugen, the head of oil markets at Rystad Energy, believes the world’s onshore oil storage could be packed to the brim by the first week of May and the market should brace for unprecedented low prices in the weeks ahead. But for now oil has shown ever so slight recovery on the prospect of extra pledges to constrain production combined with a pact by major oil producers to limit supply.

The U.S. Dollar Currency Index  (which measures USD strength against six other major currencies – EUR has a 57.8% weighting, JPY 16.6%, GBP 11.9%), was down 0.13% to 100.33. The index hit a two-week high of 100.48 on Tuesday amid concerns over the future of oil prices.

“It’s been a pretty quiet morning overall,” said Thomas Anderson, managing director at moneycorp North America, “The focus is really on two things: what politicians and governments are doing dealing with the virus, and more importantly people are talking about the lockdown and the reopenings by state,” Anderson said.

U.S. stocks rallied Wednesday, clawing back some of the week’s losses, as investors looked to corporate earnings reports to gauge the health of U.S. businesses during the coronavirus pandemic. Most currencies traded in relatively narrow ranges against a backdrop of these steadying stock markets.

The dollar traded around flat against the Japanese yen and was around 0.41% lower against the Canadian dollar. It retained gains against the euro which closed down 0.36% agaisnt USD.

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