The dollar weakened against its peers today on thin volume traded as the market remained on edge following an unsuccessful attempt by the world’s major oil producers to halt output and as weak US data released on Friday maintained its downside pressure on the greenback. A meeting held on Sunday in Qatar came to an end with no agreement in place to curb oil production causing oil prices to plummet. Oil prices managed to recover early losses to then steady after a workers strike in Kuwait reduced the country’s output by more than half, offsetting concern over no agreement reached to halt production. It was hoped the agreement would put a dent in the global supply surplus and oil prices would be pushed higher. Negotiations fell apart once Saudi Arabia called for Iran to join the initiative to freeze output. Iran had previously declined coming on board indicating there would be no participation until its own output levels were restored to pre-sanction levels. The US dollar index was down 0.19% trading at 94.50.
The euro strengthened against the dollar with the pair up 0.31% trading at 1.1319 off its session high of 1.1332 after having come off its session low of 1.1273 reached earlier in the day. Data released on Friday which revealed that US industrial production dropped beyond forecasts for March and that US consumer sentiment declined in April continued to weigh down the dollar against the euro. The euro took a step back last week as global equity markets rallied, a move which was likely unrelated despite the proximity of the European Central Bank’s April policy meeting.
The pound strengthened against the dollar with the pair up 0.51% trading at 1.4280 off its session high of 1.4290 after having come off its session low of 1.4130 reached earlier in the day. The pound struggled against a host of currencies on Thursday as the Bank of England repeated its warnings that uncertainty leading up to the EU “Brexit” referendum will likely continue to create downward pressure on GDP growth. It has been argued that the BOE will raise interest rates if the UK votes to remain a member of the European Union.
The yen held its ground against the dollar with the pair up 0.08% trading at 108.87 off its session high of 108.99 after having come off its session low of 107.83 reached earlier in the day. The yen has strengthened considerably since the beginning of the year due to heightened safe haven demand as a result of the market being unsettled amid below zero interest rate policies adopted by the Bank of Japan and the European Central Bank. A stronger yen has made it difficult for the Bank of Japan to boost inflation and Japanese officials have indicated their readiness to intervene to weaken the yen which has been met by opposition.
The Australian, New Zealand and Canadian dollars strengthened against the greenback. The Aussie was up 0.22% against the dollar with the pair trading at 0.7742 off its session high of 0.7759 after having come off its session low of 0.7631 reached earlier in the day. The kiwi dollar gained 0.33% against the greenback with the pair trading at 0.6941 off its session high of 0.6957 after having come off its session low of 0.6841 reached earlier in the day. Data revealed that New Zealand’s consumer price index climbed 0.2% in the 1st quarter beating forecasts for a rise of 0.1% following a 0.5% decline in the previous quarter. The loonie was up 0.05% against the dollar with the pair trading at 1.2809 off its session low of 1.2794 after having come off its session high of 1.2989 reached earlier in the day. Data revealed that Canadian foreign securities purchases increased by CAD 15.94 billion in February surpassing forecasts for a rise of CAD 7.50 billion following an increase of CAD 11.41 in January.
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