The U.S. dollar fell against the euro and the yen Tuesday.
But the greenback strengthened against commodity-sensitive currencies, following weaker-than-expected trade data from China and as a rout in crude-oil prices, iron ore, and copper put pressure on resource-export currencies, analysts said.
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“A lot of the takedown in the resource currencies is being blamed on China’s trade data and falling commodity prices, which are likely to impact the currencies further,” said Colin Cieszynski, chief market strategist at CMC Markets.
bought C$1.36 late Tuesday in New York. The Canadian dollar fell to it weakest level since 2004 in early trade.
“Everyone is speculating what happens with the Fed and how low commodities will fall. Currency action is mostly about positioning, rather than fundamentals at this point,” Cieszynski said.
Meanwhile, the euro
continued to show resilience against the dollar, trading higher at $1.0893 late Tuesday in New York.
“It is encouraging to see the euro holding the $1.08 level after a 5 cent move last week. It is a significant turn,” said Cieszynski.
In the yen-dollar pair, an upward revision to the Japanese growth rate lessened speculation for additional easing steps by the Bank of Japan and boosted the yen.
Data released Tuesday showed Japan’s gross domestic product grew 1.0% in the third quarter from the prior three-month period on a seasonally adjusted annualized basis, compared with the previous estimate of a 0.8% contraction.
Broad declines in Asian stocks following sharp drops in crude oil overnight also contributed to gains in the Japanese currency, a perceived haven asset.
“BOJ easing expectations fell. That was the initial trigger, followed by stock weakness,” said Akira Moroga, manager of forex products group at Aozora Bank.
fell to ¥122.95 by late Tuesday from ¥123.29 late Monday in New York, according to FactSet.