Dollar cheered by gains in U.S. stocks, oil prices
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - The dollar rose on Thursday, bolstered by gains in the U.S. stock market and a rebound in oil, suggesting that the Federal Reserve may not be as constrained to push ahead with its plan to raise interest rates several times this year.
Oil prices have been volatile the first two weeks of the year, but on Thursday, U.S. crude futures were up more than 2 percent CLc1. That supported shares on Wall Street, with key indexes up more than 2 percent as well. [O/R] [.N]
In the currency market, that means gains for the dollar and losses for the safe-haven yen and low-yielding euro. Both tend to gain in times of market anxiety because they are often used to fund investments in risky assets. They consequently rise back up when there is a retreat from those assets.
"After several sessions of being risk off, we're seeing a bit of a modest reprieve," said Mazen Issa, senior FX strategist at TD Securities in New York.
"In that environment, we're seeing the funders (euro, yen) underperform and the high-beta currencies (higher-yielders) outperform."
In late trading, the dollar index rose 0.2 percent to 99.086 .DXY.
The euro fell 0.1 percent against the dollar to $1.0860 EUR=, while the greenback gained 0.3 percent to 118.06 yen JPY=.
The euro had earlier benefited from a Reuters report saying European Central Bank policymakers see less need for further stimulus in the near term. Continued...