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FOREX-Dollar flat, commodity currencies rise with oil

Published 05/08/2015, 12:49 am
Updated 05/08/2015, 12:56 am
© Reuters.  FOREX-Dollar flat, commodity currencies rise with oil
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* Disappointing U.S. data raise doubts on rate hike in Sept.

* Weaker dollar spurs rebound in oil, commodity prices

* Aussie jumps after RBA tones down its weak currency views

* Canadian dollar recovers slightly from 11-year low (Adds market action, changes dateline, previous LONDON)

By Richard Leong

NEW YORK, Aug 4 (Reuters) - The dollar was little changed against a basket of currencies on Tuesday following a batch of disappointing economic data, while currencies tied to commodities rebounded on a stabilization in oil and metal prices that had fallen sharply in recent weeks.

The Australian dollar was the biggest gainer after that country's central bank dropped a long-used reference in its post-policy-meeting statement to a further decline of the currency being necessary.

"It's been a quiet day with most major currencies against the dollar," said Brian Dangerfield, currency strategist at RBS (LONDON:RBS) Securities in Stamford, Connecticut. "The focus is on commodities and commodities exporters' currencies," he added.

A record small rise in U.S. wage gain in the second quarter on Friday and a surprise fall in a private measure of domestic manufacturing activity on Monday raised doubts about the chances the U.S. Federal Reserve would raise interest rates in September.

Bets on a delay in a Fed rate hike have eroded the greenback and boosted the currencies of oil and other commodity exporters, analysts said.

"A renewed drop in commodity prices influences inflation and monetary policies of all the major economies," Dangerfield said.

The dollar index .DXY was down fractionally at 97.475, paring earlier losses.

The greenback was little changed on the day versus the yen at 124.02 yen JPY= , while the euro was flat at $1.0951 EUR= .

Global commodity prices have gained footing on the greenback's recent losses, helping to stabilize the currencies of commodity exporters such as Canada.

The Canadian dollar last traded at C$1.3126 per U.S. dollar CAD=D3 , recovering from C$1.3176, which was its lowest since August 2004.

Oil, metal and other commodities markets had weakened on worries about excess supply and falling demand from China.

Brent crude prices in London hit a six-month low before recovering 1.1 percent at $50.04 a barrel, while benchmark copper prices CMCU3 was up 0.35 percent.

Meanwhile, the Reserve Bank of Australia's perceived change in currency stance stoked a jump in the Aussie. But analysts cautioned its long-term prospects remain weak.

"I wouldn't rush out to declare the four-year downtrend in the Aussie against the dollar over, but it's not the most attractive short looking forwards," said Kit Juckes, a strategist with Societe Generale (PARIS:SOGN) in London.

The Aussie was up 1.6 percent at $0.7402 AUD=D4 , recovering further from a six-year trough of $0.7234 set last week.

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