Dollar drops as Fed rate rise prospects reassessed
The dollar fell against a basket of currencies on Wednesday as investors re-evaluated whether the U.S. Federal Reserve will raise interest rates this year, which also sent the higher-yielding Australian dollar to a three-month high.
The U.S. dollar sagged against the euro and the yen after a downbeat productivity data sapped some of the momentum it had gained from last week's robust jobs report.
The dollar was down 0.5 percent at 101.40 yen JPY=, having gone as high as 102.66 on Monday on the strong nonfarm payrolls data. The euro rose 0.2 percent to $1.1142 EUR=, touching a 5-day high of $1.1156.
"The release of the third consecutive decline in quarterly U.S. productivity – the worst run since at least 1980 – does not bode well for the prospects for the dollar," Morgan Stanley head of currency strategy, Hans Redeker, said.
Oil prices extended losses
Oil prices extended losses in Asia today after industry data showed a rise in US crude stockpiles, supporting oversupply concerns.
The American Petroleum Institute said overnight yesterday that crude supply had increased by around 2.1 million barrels last week.
Investors are now waiting for official data on US commercial crude stockpiles for the week ending August 5 due later today, which will give further indication of demand in the world's top oil consumer.
Reference: The Economic Times, Reuters
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