Dollar slips further, crude oil prices rebound

Mon Mar 23, 2015 4:42pm EDT
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By Herbert Lash

NEW YORK (Reuters) - The dollar fell further on Monday on views a Federal Reserve interest rate hike will come later rather than sooner, and the decline helped boost oil prices.

U.S. stocks gave up gains and closed slightly lower.

U.S. energy shares initially were among the biggest gainers on Wall Street as crude prices rebounded on the weak dollar. The euro rose more than 1 percent and the dollar index, a gauge of the greenback against six major currencies, lost almost as much.

Gold rose for a fourth day to a two-week high, while London copper prices hit their highest since Jan. 9. A weaker dollar boosts the purchasing power of commodity buyers paying with other currencies.

Traders and investors are focused on when the Fed will tighten policy, viewed as most likely in September or October.

The dollar added to its steepest weekly drop in 3-1/2 years after a Fed statement last week suggested a less-aggressive timetable for hiking interest rates, leading the greenback to suffer its worst week against the euro since late 2011.

"There's a very large long-dollar position in the market, and what we appear to be facing is an unwind of that position," said Richard Cochinos, head of Americas G10 FX strategy at Citi in New York.

A Fed rate hike is "widely expected" this year, though the path for subsequent policy moves will be on a meeting-by-meeting basis, Fed Vice Chair Stanley Fischer said on Monday.   Continued...

Traders work on the floor of the New York Stock Exchange March 17, 2015. REUTERS/Brendan McDermid