The US Dollar Advances on Stability in Oil Prices

The US dollar gained on Monday after hitting its lowest in four months against the single currency. However the US stock markets recovered as crude oil prices witnessed some correction after hitting $107 per barrel. The traders were uncertain about the increasing energy prices and future of interest rates.

The dollar index DXY which measures the US dollar’s performance versus its six major rivals surged to 76.488 on Monday as compared to 76.385 on Friday’s North American trading session.

The Euro remained volatile on Monday and declined to 1.39712 against the US dollar as compared to 1.3991 on Friday’s late trading hours. The single currency bounced back after reaching its highest since November of 1.4036 versus the greenback. The Euro fell after news the Moody’s Investors Service reduced its rating for Greece to B1.

Global head of foreign exchange strategy Adam Cole from RBC Capital Markets commented, “It’s a reminder that peripheral debt issues may be on the back burner, but they have not gone away.”

However euro is expected to perform in the month of April as the European Central Bank will consider increasing its key interest rates. According to forecasts of many analysts the euro is expected to increase to 1.47 against the US dollar in the third quarter as compared its earlier forecast of $1.28.

The British Pound also declined to 1.6205 versus the US dollar as compared to 1.6266 on Friday’s North American trading session. The US dollar however remained under pressure versus the Japanese Yen on resignation of the Japan’s foreign minister Seiji Maehara. The greenback dropped to 82.28 against the Japanese Yen as compared to 82.31 on Friday’s trading session.


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