MW: Dollar surrenders some gains; euro reclaims $1.31
By Deborah Levine and Sarah Turner, MarketWatch
NEW YORK (MarketWatch) — The dollar fell against the euro Wednesday, reversing some of the prior session’s move higher on the shared currency as stocks recovered and Spanish debt yields fell.
The ICE dollar index DXY -0.27% , which measures the greenback against a basket of six currencies, declined to 79.659, from 79.875 late Tuesday.
The euro EURUSD +0.35% rose to $1.3129, up from $1.3078 in late North American trading Tuesday.
The dollar had gained Tuesday as worries about Spanish debt returned to the spotlight, weighing heavily on equities and boosting assets considered safer, including the dollar and the Japanese yen as well as Treasury bonds. Read more about Tuesday’s dollar and yen gains.
“There was no hard news driving the crisis of confidence in Spanish debt over Easter. There is no hard news behind the relative stability we see today,” said Kit Juckes, head of foreign-exchange research at Societe Generale. “Euro-dollar has gone on a gravity-testing rally again, though it remains firmly in its range.”
The dollar’s decline started during the Asian session, shortly after Alcoa Inc. AA +5.15% reported an unexpected first-quarter profit, supporting Asian stocks and underpinning U.S. stock futures.
The safe-haven dollar dipped as “Asian stocks recovered off their lows, prompting a modest bias toward U.S. dollar underperformance,” said Sue Trinh, currency strategist at RBC Capital Markets.
U.S. stock futures pointed to an opening bounceback from five days of losses. A fall in Spanish and Italian yields also supported stocks and the euro. Read about U.S. stock futures.
Against the yen, the dollar USDJPY +0.26% recovered a bit to buy ÂĄ80.91, from ÂĄ80.72 late Tuesday.
The yen was supported Tuesday by a Bank of Japan decision to stand pat on interest rates and asset buying.
The British pound GBPUSD +0.30% traded at $1.5903, also rebounding after a loss Tuesday that left it at $1.5869. Sterling often falls when other risky assets do.
Deborah Levine is a MarketWatch reporter, based in New York.
Sarah Turner is MarketWatch's bureau chief in Sydney.
