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Dollar erases losses with oil market in focus

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Investing.com -

Investing.com - The dollar erased losses against the other major currencies on Tuesday, despite the release of disappointing manufacturing activity from the New York area as investors continued to focus on the oil market.

USD/JPY was down 0.64% at 113.89.

The Federal Reserve Bank of New York said that its general business conditions index improved to -16.7 this month from a reading of -19.4 in January. Analysts had expected the index to rise to -10.0 in February.

Markets were jittery after a meeting between oil ministers from Saudi Arabia, Russia, Qatar and Venezuela ended with consensus to freeze output, but not to cut production.

Oil prices soared nearly 6% earlier Tuesday following news that oil ministers from top producers Saudi Arabia and Russia were to meet in Qatar, fueling speculation of a coordinated cut in crude output.

In U.S. morning trade, crude oil futures for March delivery were back down below $29 a barrel, after rising above $31 earlier in the day.

EUR/USD fell 0.21% to trade at 1.1133, after rising to 1.1193 earlier in the session.

Data on Tuesday showed that German economic sentiment fell sharply this month, amid concerns over falling oil prices , slowing global growth and heightened market volatility.

The ZEW index of German economic sentiment fell to 1 this month from 10.2 in January, but was still slightly better than economists' forecasts for a reading of zero.

Elsewhere, the dollar moved higher against the pound and the Swiss franc, with GBP/USD down 0.94% at 1.4300 and with USD/CHF rising 0.22% to 0.9891.

Sterling strengthened after opinion polls showed that there was a clear majority in favor of Britain remaining in the European Union.

Separately, the U.K. Office for National Statistics said the rate of consumer price inflation rose by 0.3% last month, matching forecasts and up from 0.2% in December.

Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a rate of 1.2% last month, below forecasts for 1.3% and down from 1.4% in December.

Meanwhile, the Australian and New Zealand dollars were lower, with AUD/USD down 0.68% at 0.7090 and with NZD/USD tumbling 1.44% to 0.6552.

In the minutes of its February policy meeting on Tuesday, the Reserve Bank of Australia said that record-low interest rates are helping consumer spending and house building while a lower currency is improving firms' competitiveness.

USD/CAD climbed 0.45% to trade at 1.3899 as oil prices resumed their downward trend, dampening demand for the commodity-related loonie.

Separately, Statistics Canada reported on Tuesday that manufacturing sales increased by 1.2% in December, beating expectations for a 0.7% rise. Manufacturing sales gained 1.2% in November, whose figure was revised from a previously estimated increase of 1.0%.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.21% at 96.95, the highest since February 8.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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