FOREX- Dollar loses steam, euro steadies as oil backs off in volatile day - Reuters.com

 (New throughout, updates prices, market activity, comments; new
byline; changes dateline, previous LONDON)
    * Dollar index up less than 0.1%
    * Euro still down 0.4% despite bounce from $1.08
    * Forex market takes cue from oil prices

    By David Henry and Saikat Chatterjee
    NEW YORK/LONDON, March 7 (Reuters) - The U.S. dollar
reversed almost all of its earlier gains while the euro found
itself on a steadier footing on Monday as oil prices retreated
from highs reached as the United States and Europe considered
banning Russian crude. 
    The dollar index was last up less than 0.1% at 98.94
in morning trading in New York having climbed as much as 0.6%
overnight when the euro plunged on concern that higher energy
prices will spark stagflation and hammer the European economy as
it tries to recover from the pandemic.
    The euro was last off 0.4% against the dollar at $1.089
after dropping as much as 1% earlier and 3% over three days.
    "The forex market is taking its cues from oil," said Joe
Manimbo, senior market analyst at Western Union Business
Solutions. 
    Brent crude fell back from a high of $139.13 and was
last up around 2% at $120.30 a barrel. The spike came as the
U.S. and European allies considered banning Russian oil imports
and on reports of delays in talks with Iran about replacement
supplies.
    After the Russia-Ukraine war began euro/dollar volatility
gauges climbed to their highest levels since March
2020. 
   On Monday the euro held above $1.08, with its about turn at 
$1.0806 potentially noteworthy for coming days, Manimbo said. 
    "Maybe the market will be careful about pushing it further
downward ahead of the European Central Bank meeting on
Thursday."
   The ECB will wait until the last months of the year to raise
rates, according to economists polled by Reuters poll.
  
   After flirting with parity to the Swiss franc earlier on
Monday, the euro traded up 0.6% at 1.0079 francs. It
was also up slightly versus the yen. 
    Against the dollar, a volatile British pound was last down
0.5% at $1.3157.
    The Aussie, which tends to trade with commodity prices, was
down 0.3% against the dollar, more than reversing all of an
earlier 1% rise.  
    The conflict in Ukraine and harsh international sanctions on
Moscow have sent Russian assets tumbling, while prices of the
country's exports such as precious metals, oil and gas have
soared at a time when the global economy was already grappling
with inflationary pressures.
    Europe is the most vulnerable as it imports as much as 40%
of its natural gas from Russia and the single currency has
become increasingly correlated with oil prices - the higher oil
climbs, the more the euro falls.
    "The euro continues to absorb the most pressure of major
currencies on the fallout from the war in Ukraine," said John
Hardy, head of FX strategy at Saxo Bank.
    According to Goldman Sachs, a sustained $20 oil rise shock
would lower real economic growth in the euro area by 0.6% and by
0.3% in the United States. But in a more adverse scenario if
Russian gas shipments via Ukraine were curtailed, then euro area
GDP could fall by as much as 1% from gas alone.
    ========================================================
    Currency bid prices at 10:06AM (1506 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index                 98.9400        98.8940     +0.06%         3.426%        +99.4150    +98.6640
 Euro/Dollar                  $1.0890        $1.0933     -0.39%         -4.21%        +$1.0967    +$1.0806
 Dollar/Yen                   115.3250       114.6550    +0.59%         +0.19%        +115.3500   +114.7700
 Euro/Yen                     125.58         125.49      +0.07%         -3.63%        +125.9400   +124.4000
 Dollar/Swiss                 0.9256         0.9163      +1.02%         +1.47%        +0.9259     +0.9192
 Sterling/Dollar              $1.3157        $1.3227     -0.51%         -2.70%        +$1.3265    +$1.3141
 Dollar/Canadian              1.2758         1.2725      +0.25%         +0.90%        +1.2766     +1.2686
 Aussie/Dollar                $0.7351        $0.7372     -0.27%         +1.13%        +$0.7441    +$0.7347
 Euro/Swiss                   1.0080         1.0021      +0.59%         -2.79%        +1.0097     +0.9973
 Euro/Sterling                0.8277         0.8254      +0.28%         -1.46%        +0.8284     +0.8204
 NZ                           $0.6845        $0.6861     -0.20%         +0.04%        +$0.6925    +$0.6840
 Dollar/Dollar                                                                                    
 Dollar/Norway                9.0225         8.9365      +0.90%         +2.35%        +9.0505     +8.9585
 Euro/Norway                  9.8300         9.7893      +0.42%         -1.83%        +9.8608     +9.7218
 Dollar/Sweden                9.9485         9.8646      +0.63%         +10.32%       +10.0691    +9.8662
 Euro/Sweden                  10.8352        10.7677     +0.63%         +5.87%        +10.9048    +10.7707
 

    
 (Reporting by David Henry in New York and Saikat Chatterjee in
London; Editing by Kirsten Donovan)
  

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https://www.reuters.com/article/global-forex/forex-dollar-loses-steam-euro-steadies-as-oil-backs-off-in-volatile-day-idUSL2N2VA14P

2022-03-07 15:43:00Z
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