USD stronger on lower oil prices as G8 summit begins

Story link: USD stronger on lower oil prices as G8 summit begins

The US dollar strengthened in relation to the euro Monday as the Group of Eight summit began as guesses circulated that the US will use the meeting to try to find a way to stop the rise in crude oil prices, which were lower during the session on comments from Iran’s foreign minister but still held above $141 per barrel.

Gains in the greenback also came after comments from US President George W. Bush before the beginning of the G8 meeting which supported the concept of a strong dollar insisted that the US economy is fundamentally sound despite slowing growth.

At just past noon in New York, the dollar traded at $1.5695 to the euro, which was down on a surprise decline in industrial production in Germany, while it took ¥107.1850 to buy a dollar.

The Japanese currency also declined in relation to the euro, the South African rand and the Mexican peso with declines against the rand and the peso coming as gains in equities markets made more investors willing to seek out risky carry trades.

The yen traded at ¥168.2267 to the euro, at ¥13.849 to the rand, and at ¥10.379 to the peso in midday trade in New York.

The rand, however, weakened versus the US dollar to trade at R7.7488 to the greenback on indications that importers are selling the currency to take profits after four days of gains.

The pound was weaker after the Office of National Statistics issued data showing that manufacturing output in the UK was down 0.5 percent in May from the previous month against a prediction of no change.

The new figures made it less likely that the Bank of England will raise interest rates when it meets on July 10.

In early afternoon trade in New York it took $1.9744 to buy a pound while the UK currency stood at 79.49p to the euro.