The dollar advanced against the euro and yen Tuesday, recovering somewhat after getting beaten up by those big rival currencies a day earlier.
And in what looked to be a partial unwind of Monday’s hectic session, the dollar surrendered its gains against emerging-markets currencies as well as the so-called commodity dollars — the currencies of Australia, New Zealand and Canada.
“It’s a recovery from yesterday’s instability,” said Josh O’Byrne, G-10 FX strategist at Citigroup. “It’s hard to put much else on it other than that.”
The ICE U.S. Dollar index DXY, +0.64% a measure of the greenback’s strength against a basket of six currencies, was up 0.7% to 93.9990 in recent action after slumping 1.7% on Monday. It is still down 0.8% for the week, but up 4.2% for the year so far.
The buck was already up for the day in early trading, but it then added to its gains after China’s central bank cut its benchmark interest rates.
The euro EURUSD, -1.1446% was down 1% to $1.1474 on Tuesday. The dollar USDJPY, +1.31% climbed 1.2% to 120.16 yen. The Japanese currency had benefited Monday from haven demand as stocks plunged world-wide.
Crude oil prices rebounded sharply Tuesday, with Nymex traded crude up 2.6% to $39.24 a barrel. But industrial metals continued to sell off. The price of copper traded on the London Mercantile Exchange fell 3.1% to $4,888 a tonne.
U.S. stock futures ESU5, +3.49% were surging early Tuesday, with all 30 Dow components showing gains. The dollar weakened against its main rivals Monday as analysts said the selloff in U.S. stocks all but quashed any chance the Federal Reserve will lift interest rates next month.
“Due to the weakening U.S. interest rate expectations, the EURUSD has become fundamentally bullish,” said Lukman Otunuga, a research analyst at FXTM, in a note on Tuesday.
The Australian dollar AUDUSD, +0.6707% was up 0.8% to 72.22 cents; the New Zealand dollar NZDUSD, +0.8180% was up 1.3% to 65.27 cents; the Canadian dollar CADUSD, +0.6515% was up 0.7% to 75.81 cents. The Mexican peso rose 1.2% to 16.96 pesos per dollar, moving off of a record low from Monday’s session.
