The dollar declined against the oil-linked currencies on Thursday as the crude oil prices rebounded after the collapse. The U.S. currency fell by 0.7% to 10.6894 against the Norwegian crown. And the greenback lowered by 0.8% to 75.38 versus Russian rubles on Thursday.
Furthermore, the dollar dropped down against the Canadian dollar to C$1.4134, following a 0.3% fall on Wednesday. However, it was little changed against the yen as the pair remains stuck in a holding pattern. It last traded at 107.78 yen.
The dollar-oil trade meant that the greenback rose when commodities fell – noted the chief currency strategist at Mizuho Securities in Tokyo, Masafumi Yamamoto. Still, this dynamic is starting not to work. According to him, the dollar is weak against other currencies, showing that the foreign exchange market, at least, is beginning to stabilize.
Meanwhile, the Australian dollar rebounded from an early fall to rise 0.23% to $0.6339, while the New Zealand dollar added 0.37% to $0.5979.
How did the Euro fare?
The euro was steady on Thursday as traders watched closely for a meeting of European Union officials. They planned to discuss the bloc’s response to the economic turmoil caused by the coronavirus pandemic worldwide.
The euro traded at $1.0828 versus the dollar and 87.62 pence against the pound. However, it may decline if the uncertainty lasts longer.
The European Central Bank has consented to accept junk bonds as collateral to allow banks to finance themselves at the ECB. That should be a positive factor for the euro. However, investors are waiting for details on the fiscal response.
Markets are wary as it is uncertain how far EU governments will cooperate in financing the recovery from a possible deep recession. A bloc official noted that it might take EU countries until the summer or longer to decide how exactly to finance aid to help economies recover.