Increased oil prices hit the dollar

The dollar slumped against the currencies of oil producers. After an unprecedented collapse in crude prices, a rebound helped calm markets weakened by the massive drop in global demand. 

The euro held strong against the dollar and the pound. The leaders of the European Union are meeting on the response to the economic turbulence caused by the Coronavirus outbreak.

The block official said that it might take EU countries long to agree on how to finance aid to help economies recover.

Initially, the rebound in oil prices was slight. However, the dollar lost its value as oil futures increased gains. 

Masafumi Yamamoto, Mizuho Securities’ chief currency strategist, said that the dollar increased when commodities dropped. Yet, this dynamic is not going to work anymore. The dollar is not stable against other currencies. The foreign exchange market is starting to stabilize, Yamamoto said.

The US dollar dropped 0.7% against the Norwegian crown. The rise in oil prices pulled back a one-month high reached on Wednesday. 

The dollar slumped 0.8% to Russian rubles.

The greenback edged lower against the Canadian dollar following a 0.3% decline on Wednesday.

The dollar initially climbed against the Mexican peso. However, it reversed course and declined to 24.3850. 

The dollar weakened against other currencies

The US West Texas Intermediate (WTI ) futures climbed by 10.16% to $15.18 a barrel. On Monday, April WTI futures fell to a historic low to minus $37. 

Brent crude climbed 11.83% to $22.78 a barrel, recovered from its lowest level since June 1999. 

Countries are running out of storage space to stock the oil that isn’t used. It could lead to further turmoil for commodities markets. Officials from the EU will discuss the region’s response to the economic harm that the Coronavirus outbreak caused. 

Markets are suspicious because it is not clear how far EU governments will cooperate in financing the recovery from a deep recession. 

The European Central Bank has accepted junk bonds as collateral to let banks finance themselves at the ECB. It should be a decisive factor for the euro. Still, investors are waiting for details on the fiscal response.

The dollar changed against the yen and last traded at 107.78 yen.

The Australian dollar improved from an early decline and saw an increase of 0.23% to $0.6339 since the dollar weakened against other currencies connected to the global commodities trade.

The New Zealand dollar raised 0.37% to $0.5979.