By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The dollar extended gains against major rivals in Asian trading on Wednesday, as investor appetite for riskier assets softened amid worries about the trajectory of global economic growth.
The dollar index DXY +0.02% , which measures the greenback against a basket of six currencies, traded at 73.206, from 73.127 in late North American trading on Tuesday.
The euro EURUSD -0.0135% traded at $1.4804, down from $1.4831, with reports that Portugal has negotiated an international bailout worth €78 billion doing little to lift the European currency.
Sterling GBPUSD -0.0849% traded at $1.6468, extending heavy losses from Tuesday when the British currency dropped 1.1% to $1.6470 after a weak manufacturing survey.
The relative strength for the greenback comes at a time of sliding commodity prices, with oil futures down 54 cents at $110.50 a barrel in Wednesday’s Nymex electronic trading session; gold futures down $7.70 at $1,532.70 an ounce; and silver futures down $1.38, or 3.2%, to $41.20 an ounce. Read more on commodity prices
“We are continuing to see a growing number of commodity complexes struggle, as investors begin to appreciate that the macro environment going into the second half of the year — one marked by high inflation and interest rates — will be far less hospitable for the asset class,” said analysts at MF Global.
The latest move for oil prices followed news out late Tuesday from the American Petroleum Institute that U.S. crude-oil inventories rose 3.2 million barrels the week ended April 29, exceeding expectations for an increase around 1.7 million barrels, according to analysts polled by Platts.
Amid weaker commodity prices, the Australian dollar AUDUSD +0.0277% traded at $1.0815, from $1.0856 in late North American trading Tuesday.
In line with the market’s safe-haven bias, the dollar declined against the Japanese yen USDYEN -0.0618% , to trade down 0.2% at ¥80.90.
The recent gains for the U.S. dollar follow the currency’s plumbing of 2008 lows early in the week, and some strategists believe that the U.S. currency will soon resume its downward trend.
“Short of powerful risk aversion, short-covering or pity, it is still very hard to see a sustained U.S. dollar rally unfolding soon. That said, the pace of U.S. dollar decline since mid-April was simply unsustainable,” said currency strategists at RBC Capital Markets.
Key U.S. jobs data is on tap for the end of the week, while interest-rate decisions are due Thursday from the European Central Bank and the Bank of England.
