Dollar weakens on oil, producer price data

The US dollar weakened Tuesday in relation to the euro and other currencies on another surge in oil prices as crude oil reached a new record at $129.31 per barrel in New York and after US producer prices rose in April.

The greenback was trading at $1.5651 to the euro at around 11:15 a.m. in New York, while it took ¥103.7250 to buy a dollar after investors backed away from yen-financed carry trades as Asian equities markets declined and after the Bank of Japan held interest rates steady at 0.5 percent.

The euro got support from remarks from a government advisor in Germany, who was of the opinion that the European Central Bank will raise interest rates as soon as the current financial climate improves.

The dollar was also weaker versus the pound, the Swiss franc and the Australian dollar, with the dollar at $1.9690 to the pound while it took SFr1.0383 to buy a dollar and the Aussie traded at 95.84 cents US.

Meanwhile, the Norwegian krone strengthened in relation to the euro and the US dollar, to kr4.9999 and kr7.8300 respectively, on oil prices and the expectation that Norges Bank will hike interest rates to 5.75 percent before the year is out.

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