U.S. dollar cautiously trades as other commodity-linked currencies stood firm after oil’s rally

US dollar index

The U.S. dollar watfully trades on Thursday as it is currently facing a headwind from the drop of yields. Other currencies that are linked to commodities were somehow given support by the recent rally in the oil market.

Sumitomo Mitsui Banking Corporation’s senior global market analyst Satoshi Okagawa said that the pull back of U.S. 10-year bond yields from its highest level has resulted to a soft trading of the greenback. Yields have risen as high as 2.42 percent, it touched its best level in nine months on the previous week by jumping 2.504 percent. However, it tumbled yesterday after global investors stabilized perfolios before 2017 ends.

The index which tracks the value of the U.S. currency against its major peers, the dollar index, was last seen at 92.980. The index dropped to its lowest level since December 1 on the previous trade at 92.956. Versus its Japanese counterpart, the greenback eased by 0.2 percent at 113.19 yen. It is still under a four-week high of 113.75.

Commodity-linked currencies are still strong in the midst of the recent oil rally, with the price of copper reaching a four-year high and oil prices notching a 2-1/2 year high. The Canadian dollar was last seen at C$1.2639 after touching its highest level in three weeks at C$1.2627 yesterday. The Australian dollar notched its best level in two months by jumping 0.8 percent at $0.7780 on the day.

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