Dollar Recovers Against Global Currencies, Oil Softens On Profit Booking

Dollar Recovers Against Global Currencies, Oil Softens On Profit Booking

The U.S. Dollar (CURRENCY:USD) rose against the Euro and the British Pound but traded weaker against the Japanese Yen today. USD/JPY (USDJPY) fell 0.46% to 106.50.

The dollar slump stems from Federal Reserve Chair Janet Yellen’s comments earlier this week when she hinted through omission that interest rates are less likely to rise until the economic outlook improves further. Her remarks came after nonfarm payrolls data showed the slowest pace of growth in more than five years.

EUR/USD (EURUSD) fell 0.24% to 1.1367 and GBP/USD (GBPUSD) slipped 0.27% to 1.4464 during today’s trade. The Euro went down after a report disclosed an unexpected fall in German imports for May. At the same time, European Central Bank President Mario Draghi cautioned markets that uncertainty over the Euro’s future is preventing the eurozone’s recovery.

Equities nervous ahead of referendum

Asian equities were choppy, led by lower Japanese stocks. A weak dollar guided Japanese stocks lower while a surprise interest rate cut by South Korean Central Bank failed to impress investors. Japan’s Nikkei 225 (INDEXNIKKEI:NI225) plunged 0.97% to 16,668.41, while China’s Shanghai SE Composite Index finished the day lower by 0.30% to 2,927.16.

European markets conveyed the same sentiment as Asian stocks while traders appeared cautious over a change of perception about the U.S. economic recovery and the looming Brexit referendum also weighed on sentiment. Dismal U.S. employment numbers released last week have reinstated fears of a slow recovery in the region. Britain’s FTSE 100 (INDEXFTSE:UKX) opened sharply lower by 0.91% at 6,244.05. Weak German imports data pushed the DAX (INDEXDB:DAX) down by 1.35% to 10,079.09.

After gaining on three consecutive sessions, oil prices started softening during early European hours today due to profit-booking. The U.S. Energy Information Administration (EIA) report yesterday showing a drop in U.S. crude stockpiles by 3.23 million barrels to 532.5 million helped Brent Crude to surge to $52.86, its highest level since October 2015.