US dollar benefited from falling oil prices

The US dollar benefited from falling oil prices yesterday (under $120) and rose against all other currencies except the Mexican peso, which is on a tear of its own (possibly due to speculative repatriation). At 8 am, the Euro opened the US day at 1.5576 and closed the day around 1.5570, which doesn’t sound like much but represents a nice drop from the early morning high at 1.5632. In other words, traders were buying Euros tried to rally the Euro and failed. This did not go unnoticed overnight in Asia, where traders were selling Euros through the Friday low at 1.5510 and into the 1.5400 territory a round number breakout.

At 7:53 am ET, the price of oil is $118.82. The US dollar doesn’t get full credit for the Euro it’s weak across the board, including the yen and pound crosses.

The Pound, meanwhile, fell dramatically in mid-morning in the US, with Currency Traders trying to rally it but managing only 1.9718 before bears got the upper hand and tanked it over 100 points down to 1.9597, again a round-number breakout. Overnight the currency market took the pound down as low as 1.9518, or 200 points in less than 24 hours.

Australian Dollar suffered as the The Reserve Bank left rates on hold at 7.25% but Gov Stevens said "The board judged that the cash rate should remain unchanged this month. Nonetheless, with demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing." The Australian Dollar fell off the cliff. The next policy meeting is Sept 2. A cut then would be the first in 7 years. For the

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Pounds to Euros currently 1.2593

Pounds to US Dollars currently 1.9621

Pounds to Australian Dollars currently 2.1086