US dollar, hungry for gains since Yellen comments from March 29, continued to rise against other major currencies In Thursday after posting a biggest leap in a month in Wednesday amid eased concerns about global stagnation.
USD Index, which tracks the US currency against a basket of six major rivals, surged more than 1.2 percent in two days from 93.80 to 95.16 (today’s session high), erasing losses after gloomy Yellen comments tried to push Dollar lower.
On Wednesday, the index rose 0.84%, retreating from an eight-month low on Tuesday after data showed that China’s exports grew for the first time in nine months in March, signaling a leg up in global economic development.
The dollar received additional impetus yesterday on hopes G20 meeting in Washington will have new coordinated stimulation measures as a result, Asian indices showed an increase on the unexpected decision of the Central Bank of Singapore to join the ranks of ECB’s “easing-club”.
The drop on EUR / USD halted at 1.1240, the pair ranges in 1.1240-1.1290 corridor, bears powers seems to be played out. Six-month high at 1.1464 was reached on Tuesday.
The dollar fell against the yen, with USD / JPY pair declining 0.16% to 109.15, though trading significantly higher than 17-month low of 107.62 on Monday.
Growth is constrained by the yen yesterday’s comments head the Bank of Japan Haruhiko Kuroda, the central bank is ready to again loosen monetary policy if needed, adding that there are “many ways” to achieve the 2% inflation target.
Earlier this year, the Bank of Japan shocked the markets by its decision to drive rates to negative zone, however, the yen continues to strengthen, baffling plans of policymakers to stimulate the growth of prices.
The pound weakened as interest rate decision and asset-purchase targets came in line with expectations – BoE left the rate at 0.50% and asset-purchase program at 375B, GBP / USD was as low as 1.4100, bouncing back to 1.4160, still below the close of previous session.
Sentiment on the pound also came under pressure after poll YouGov has demonstrated about the same number of supporters and opponents of the UK stay in the European Union on the eve of the referendum on 23 June.
Crude futures for May rose as the dollar fell after the publication of disappointing data on US inflation, but growth is restrained on the eve of Sunday’s meeting of oil producers in Doha.
WTI started with declines today but was not ready to break $41.00 level, peaked at 42.11, Brent was as low as $43.40, later meeting resistance at $44.50.
The dollar lost its gains after data showed that consumer prices in the US rose in March, less than expected. A weaker dollar increases demand for oil, making it more affordable for buyers in other currencies.
But oil growth is likely to be limited because of the doubt what will be the result of a meeting of major oil producers in the
Qatari capital on Sunday and whether it will have a significant impact on the situation in the oil market.
Russian Energy Minister Alexander Novak said earlier that any agreement will be worked out only in general terms, with a small number of specific commitments.
Iran said it would not participate in the agreement on the freezing of production, until it returns to pre-sanction levels.
On Thursday, the International Energy Agency warned that the output deal will likely to have a limited impact on world supplies and markets are unlikely to restore the balance until 2017.
On Wednesday, data showing a larger-than-expected increase in US oil inventories also increased concerns about oversupply.
The US Energy Information Administration report said that crude oil inventories rose by 6.6 million barrels last week, bringing the total amount of crude oil reserves reached 536.5 million barrels.
Analysts had expected the stockpiles will grow by 1.85 million barrels.