Dollar dips as crude oil surge supports commodity currencies

The dollar was shackled on Tuesday by a combination of weak U.S. economic data and gains for commodity-linked currencies such as the Canadian and Australian dollars which drew support from an extended surge in crude oil prices. The dollar index against a basket of six major currencies inched down 0.05 percent to 97.001 after losing 0.35 percent the previous day, marking its biggest daily decline since March 20. On top of the pressure from buoyant commodity-linked currencies, the dollar was weighed by data showing U.S. durable goods orders declined in February and a bounce in the euro as investors squared positions ahead of a looming European Central Bank meeting. "The dollar's strength peaked out towards the end of last week, when the U.S. jobs data showed that wage increases had slowed. The currency hasn't been able to find traction since," said Shin Kadota, senior strategist at Barclays in Tokyo.
"And the latest bounce in U.S. yields did not provide much lift for the dollar as they still remain at low levels in absolute terms."