FOREX-Dollar advances on gains in U.S. stocks, oil prices
(Recasts, adds comment, updates prices, changes byline, dateline; previous LONDON)
* Euro initially firms on report ECB wary of more action
* Canadian dollar falls sharply
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 14 (Reuters) - The dollar rose on Thursday, bolstered by gains in the U.S. stock market and a rebound in oil prices, suggesting that the Federal Reserve will 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 3.8 percent at $31.63. That has supported shares on Wall Street, with key indexes up more than 1 percent on the day.
In the currency market, that means gains for the dollar and losses for the safe-haven yen and low-yielding euro.
"The big picture is really about risk," said Lee Ferridge, head of macro strategy for North America at State Street in Boston.
"In time of risk aversion, we have seen high-beta currencies such as the South African rand, the New Zealand and Australian dollars. That has led to flows into the yen." Continued...