FOREX-Commodity currencies gain, led by Aussie dollar; euro falls

By Gertrude Chavez-Dreyfuss, Saikat Chatterjee and Julien Ponthus

NEW YORK/LONDON, April 5 (Reuters)Commodity currencies rallied in choppy trading on Tuesday led by the Australian dollar, boosted by the prospect of policy tightening by the Reserve Bank of Australia (RBA), while the euro fell on French election worries and the likelihood of more sanctions on Russia over Ukraine.

The Aussie dollar paced gains among commodity currencies after the RBA dropped its pledge to be “patient” on tightening policy, while holding the key rate at a record low for now, as was expected. The New Zealand and Canadian dollars, as well as the Norwegian crown, rose in tandem with the Aussie currency.

The Aussie dollar surged 1.1% to US$0.7621 AUD=D3while the New Zealand dollar gained 0.6% to US$0.6996 USD=D3.

“We’re starting to see monetary policy elsewhere catch up with the Federal Reserve,” said Simon Harvey, head of FX analysis at Monex Europe, in London. “The general belief on current Fed pricing is that it is pretty well-priced and there isn’t much room to ratchet expectations higher.”

Expectations about Fed rate hikes have supported the greenback as higher US rates enhance the appeal of dollar-denominated assets. Since the beginning of the year, the dollar index has gained more than 3%.

In mid-morning trading, the dollar index was up 0.2% on the day at 99.165 =USDafter hitting a one-week high of 99.189.

The euro, on the other hand, was down against most currencies, except the yen.

Concerns about the outcome of the French elections have prompted traders in the euro to buy put options around $1.07-$1.09 for end-April expiry, Refinitiv data shows.

French financial markets acknowledged the possibility of far-right candidate Marine Le Pen beating President Emmanuel Macron in this month’s elections, with sharp losses on Paris’s blue chip index and government bonds. L5N2W32MF

Also impacting the euro is the possibility of more Russia sanctions.

The United States and European countries pledged on Monday to punish Moscow over civilian killings in northern Ukraine. The Kremlin denied charges related to the murder of civilians.

New sanctions could include restrictions on the billions of dollars in energy that Europe imports from Russia.

Against the US dollar, the single currency EUR=EBS briefly fell to a more than one-week low of $1.0936 and was last down 0.2% at $1.0944. The euro reached a one-month high of $1.1185 just days earlier amid increased optimism over an end to the Ukraine conflict.

Expected price swings for the euro, or implied volatility EUR1MO=FNclimbed to three-week highs as traders braced for more sanctions.

The euro’s biggest losses on Tuesday were against the Swedish crown EURSEK=D3 and Swiss franc EURCHF=EBSwith falls of 0.5% and 0.2% respectively to 10,282 crowns and 1,014 francs.

The greenback rose 0.4% against the yen to 123.28 yen JPY=EBSbroadly tracking moves in long-term US Treasury yields and retreating from a multi-year high of 125.105 on March 28.

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Currency bid prices at 10:32AM (1432 GMT)

Description

RIC

Last

US Close Previous Session

Pct Change

YTD Pct Change

High Bid

Low Bid

dollar-index

=USD

99.1330

98.9850

+0.16%

3.627%

+99.1910

+98.8370

Euro/Dollar

EUR=EBS

$1.0942

$1.0970

-0.25%

-3.74%

+$1.0989

+$1.0936

Dollar/Yen

JPY=EBS

123.2950

122.7600

+0.44%

+7.11%

+123.3400

+122.3750

Euro/Yen

EURJPY=

134.89

134.68

+0.16%

+3.51%

+135.1200

+134.3000

Dollar/Swiss

CHF=EBS

0.9284

0.9266

+0.19%

+1.78%

+0.9284

+0.9238

Sterling/Dollar

GBP=D3

$1.3129

$1.3115

+0.11%

-2.92%

+$1.3166

+$1.3104

Dollar/Canadian

CAD=D3

1.2435

1.2489

-0.43%

-1.65%

+1.2493

+1.2403

Aussie/Dollar

AUD=D3

$0.7632

$0.7543

+1.23%

+5.05%

+$0.7661

+$0.7536

Euro/Swiss

EURCHF=

1.0158

1.0162

-0.04%

-2.03%

+1.0171

+1.0133

euro/sterling

EURGBP=

0.8331

0.8368

-0.44%

-0.82%

+0.8374

+0.8333

NZDollar/Dollar

USD=D3

$0.6993

$0.6951

+0.56%

+2.13%

+$0.7034

+$0.6944

Dollar/Norway

NOK=D3

8.6840

8.7325

-0.56%

-1.43%

+8.7335

+8.6600

Euro/Norway

EURNOK=

9.5020

9.5636

-0.64%

-5.10%

+9.6612

+9.5008

Dollar/Sweden

SEK=

9.3926

9.4155

-0.58%

+4.16%

+9.4356

+9.3490

Euro/Sweden

EURSEK=

10.2776

10.3372

-0.58%

+0.43%

+10.3495

+10.2572

World FX rateshttps://tmsnrt.rs/2RBWI5E

Australian dollarhttps://tmsnrt.rs/3JhklL2

(Reporting by Gertrude Chavez-Dreyfuss in New York, Saikat Chatterjee and Julien Ponthus in London Editing by Alexander Smith and Mark Potter)

((gertrude.chavez@thomsonreuters.com; 646-301-4124; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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