The greenback traded in narrow ranges versus other major currencies on Monday in thin market condition as financial markets in the United States and the U.K. are closed for Memorial Day and Spring Bank holiday respectively. However, high oil prices together with weakness in U.S. equity markets should continue to put pressure on dollar.
Oil rose above US$133 on concerns regarding long-term supply, production problems in Nigeria and Norway also helped supporting oil prices. Rebels from Nigeria's oil-producing Niger Delta said they had blown up a Royal Dutch Shell pipeline, the attacks led to shut-ins amounting 175,000 barrels per day, however, Nigerian Minister of State for Oil said he expected the outage to be restored in the coming weeks. Crude oil surged nearly 40 percent so far this year, over 17 percent in May and recording US$135 a barrel last week. As the summer driving season kicks off, high oil prices will likely take on more importance this week.
Last Friday, the Dow Jones Industrial average just had the worst week in 3-month as worries about high oil prices hammered energy-sensitive sectors. The S&P 500 equity index also posted its biggest one-week decline since early February. Although the dollar index recovered from last week's 1-month low of 71.823, decline in U.S. stocks may continue to undermine the greenback.
The single currency confined in a 50-pt range of 1.5742-1.5792 whilst the Japanese yen also locked inside a 103.13-103.50 band.
Against the British pound, although the bucked rebounded in European morning and cable slipped to 1.9759, sterling rebounded in late trading on cross-buying and hit an intra-day high of 1.9832 before closing.
There was no major economic report released on Monday but data due out on Tuesday include German GDP for Q1, U.S. consumer confidence and more importantly the release of April new home sales data at 14:00GMT...