Dollar halts recent decline against major peers as oil price rallies
Published 26/12/2015 | 02:30
The dollar held a five-day decline against major peers yesterday after oil capped its biggest weekly advance in four months. Japanese stocks slid, while Russian bonds advanced on speculation the central bank will resume interest-rate cuts next year.
Japan's Topix index fell, completing a fifth weekly drop, with exporters leading the retreat. Shares increased in China and Taiwan. The Standard & Poor's 500 Index rose 2.8pc in the holiday-shortened week, recouping most of its losses since the Federal Reserve raised interest rates for the first time in almost a decade on December 16. West Texas Intermediate futures rose 9.7pc this week, the biggest gain since August after US crude inventories declined and drillers idled rigs.
Markets across Asia except in Japan, China, Taiwan, Thailand and Vietnam were closed for Christmas. In Europe, only Russia and Turkey were open for trading. Yields on five-year Russian bonds fell to three-week lows and the ruble trimmed a weekly appreciation. "The dollar may end the year with a little pause but it's too early to declare the uptrend has reversed," said Koji Fukaya, the Tokyo-based chief executive at FPG Securities.
"The dollar will remain solid through 2016 as interest rates rise with an improving economy."
The dollar fell 0.1pc to 120.30 yen. It was little changed at 1.0960 euro yesterday, after sliding 0.5pc in New York on Thursday. The Bloomberg Dollar Spot Index was little changed at 1,227.21, after declining for five days in the longest stretch since April. A two-day gain in commodity prices through Thursday helped boost the Australian and New Zealand dollars. The offshore yuan headed for the biggest weekly gain in two months on speculation demand for the currency will increase after Chinese authorities announced they would expand trading hours in the mainland and move to liberalise the capital account.