Dollar Up as Oil Continues to Claw Back Losses

Investing.com – The U.S. dollar was up on Thursday morning in Asia as part of the market-wide rally from losses suffered earlier in the week.

The greenback got a push from gains in oil during the previous session as the black liquid continued to claw back Monday’s colossal losses.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.06% to 100.59 by 00:38 ET (4:38 AM GMT).

Analysts said that investor sentiment is still supportive of the dollar as the COVID-19 pandemic’s negative economic impact will encourage investors to hold their funds in dollars, considered a safe haven.

“The dollar is a bit of a phoenix-type character; it seems to keep coming back,” Ray Attrill, head of FX strategy at National Australia Bank, told CNBC.

But Attrill also warned of an imminent dollar shortageas panicked investors would scramble for dollars should oil fail to resolve its ongoing oversupply quandary.

“I’m still of the view that the dollar rally is on borrowed time, but there are still signs of stress, and it’s not clear that the dollar shortage has been addressed for everyone,” he said.

The USD/JPY pair also gained 0.04% to 107.77.

Meanwhile, the AUD/USD pair dropped 0.37% to 0.630as it could not hold onto its gains from Wednesday’s encouraging data on retail salesThe NZD/USD pair also lost 0.17to 0.5939.

The USD/CNY pair gained 0.04% to 7.0858even as China Life and Ping An Insurance are expected to report big drops in new business during the first quarter later in the day.

The GBP/USD pair dropped 0.02% to 1.2330.