Dollar Gains Strength Again; Oil Extends Losses On Increased Output Talks

Dollar Gains Strength Again; Oil Extends Losses On Increased Output Talks

After declining in the previous session, the U.S. dollar (CURRENCY:USD) regained its ground against the yen today. There are diminished hopes that Japan will intervene in currency market after the U.S. released a fresh warning on the issue. This followed comments from Japanese Finance Minister, Taro Aso, who said that they need to be extremely cautious in discussing specific currency movements.

During Asian trade, USD/JPY (USDJPY) advanced 0.27% to 109.53. In other currencies, EUR/USD (EURUSD) fell 0.39% to 1.1176 while GBP/USD raced up by 0.38% to 1.4538. Demand for the greenback remained supported after fresh comments by Federal Reserve officials added to expectations of an early rate hike.

Asia weak, Europe trims losses

Asian equities traded lower as traders watch for fresh hints from the Fed around the implementation of tighter monetary policy in the U.S. Softer trading in both the Dow Jones Industrial Average (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) yesterday underscored the absence of strong catalysts in the market, according to Chris Weston, chief market strategist at spreadbetter IG. Nikkei 225 (INDEXNIKKEI:NI225) led the fall as it plunged 0.94% to 16,498.76. European markets retreated from their early day lows following the start of eurogroup meeting. CAC 40 (INDEXEURO:PX1) gained 1.12% to 4,373.49.

Oil trades below $48

Oil declined for the fifth day in a row as traders focused on increased output from major oil exporting countries and a stronger dollar. Brent Futures slumped $0.45 to $47.90 while West Texas Intermediate Crude tumbled 0.73% to $47.73.

The oil supply glut once again took the spotlight after Iraq said that its exports have touched a record high of 3.9 million barrels per day while Iran also expressed its intention of increasing output to 2.2 million barrels per day. These reports have countered the view that oil will find stability after unplanned outages in recent weeks.