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December 26th, 2014, 9:15 am | By trader | Published in LUNCH IS FOR WIMPS | Comments on this postComments Off

The U.S. dollar was elevated at its lowest level against the safe-haven yen in an estimated one month last week while the Russian ruble continued its dive against the greenback following an extended decline in oil prices sparked concerns over the global economy.

The dollar likewise hit more than three-week lows against the Swiss franc and the euro following the fall of Brent crude below $59 a barrel for the first time in more than five years which significantly extended a six-month sell-off resulting in traders to take profit from recent dollar strength.

The continued oil plunge is causing volatility in currencies which causes people to take profit in the dollar. The threat that the cascading oil prices pose to the Russian economy as well as the central bank’s failure to curb the currency’s plunge through an emergency rate hike, resulted to the Russian currency to fall further to record lows of more than 70 per dollar. The sale of gas and oil are considered Russia’s primary source of export revenue.

The dollar was last up 9.61 % against the ruble which was traded at 72.37 rubles. When there is a deeply mono-export culture which is connected to oil, then the consequences of much lower prices are generally considered quite unlucky.

Experts likewise said that the drop in oil prices might give the Fed all the more reason to maintain an accommodative position towards monetary policy at the end of the two-day meeting last week which prompted the U.S. central bank to keep near-zero benchmark interest rates on hold for much longer. That suspicion impacted the dollar which resulted to traders preferring the yen.

A Fed rate hike is expected to augment the dollar by attracting investment flows into the United States. The euro was last up 0.6 % against the dollar at the rate of $1.2512, which was not far from the three-week high of $1.2569. The dollar was then last seen below 0.61 % against the Swiss franc at 0.9596 franc, just short over the three-week low of 0.9555.

The dollar was last down 0.97 % against the yen at 116.68 yen, holding near the session low of 115.58 which was considered its lowest since the 17th of November. Furthermore, on Wall Street, the benchmark of S&P 500 stock index was last up 0.45 % respectively.

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