Dollar rises following another oil price drop

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TOKYO: The dollar rallied against emerging units on Friday while retreating against the yen as another oil price drop added to bearish market sentiment.

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US crude fell below $31 a barrel after news that American stockpiles rose to the highest in more than eight decades, reigniting concerns about demand and broader worries about the global economy.

“Sentiment on the oil market has been a key macro driver for stock-market sentiment recently,” said Ric Spooner, Sydney-based chief market analyst at CMC Markets, according to Bloomberg.

“Concerns about the potential for credit-market problems in the event of a lower-for-longer oil scenario are near the top of a fairly long list of macro factors worrying investors at the moment.”

Traders pushed into the Japanese yen—considered a safe investment in times of turmoil—on the back of the uncertainty that hung over stock and forex markets.

“The increase in oil inventories completely changed the market’s mood,” Keisuke Hino, a New York-based foreign-exchange trader at Mizuho Bank, told Bloomberg News.

“Oil remains the main market driver. The euro falling against the yen also weighed on the dollar-yen” rate.

The dollar fell to 112.80 yen from 113.24 yen Thursday in New York, while the euro dropped to 125.51 yen from 125.76 yen. The single currency was at $1.1128 and $1.1105.

The risk-off sentiment and the glut in crude prices pushed the Malaysian ringgit sharply lower.

The oil-linked unit dropped 1.25 percent against the greenback, reversing sharp gains from the previous day.

The Singapore dollar also slipped against the US unit, dropping 0.31 percent, while Indonesia’s rupiah was off 0.32 percent and the Thai baht lost 0.38 percent.

The South Korean won, Taiwan’s dollar and the Philippine peso also fell against the US unit.

AFP

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