The dollar was falling Wednesday morning as stocks advanced, after the Institute for Supply Management said that the service sector of the economy contracted at a slower pace for a second month. Also helping stocks was a boost in oil, which gained after the Energy Information Administration said demand for gasoline on a yearly basis improved last week; demand contracted 0.5% on a yearly basis last week, 1.2 percentage points less than two weeks ago.
The pound was gaining about 50 pips on the dollar as Wall Street advanced, while Australia's currency was making an eighty pip gain. USD/JPY was up 40 pips while the euro remained virtually unchanged.
Aggressive Central Bank policies are seeing those currencies favored, said Matthew Carniol, chief currency strategist at TheLFB-forex.com. Australia's dollar may have made a turnaround after a long period of decline against the greenback after the RBA cut rates by 100 basis points and issued a dovish statement at the same time as the government announced a new stimulus package.
In recent trade, the DOW was up just 1.27 points (0.02%) while the S&P was gaining 5.45 points (0.65%) and the NASDAQ 21.45 points (1.41%). Crude oil for March delivery was gaining 38 cents (0.88%) and gold was higher by $15.00 (1.68%).