Dollar at 3-week high as commodity prices tumble
The dollar index scaled a three-week high on Thursday as a rout in commodities prompted an unwinding of dollar-funded bets on risky assets, a sell-off that dragged the euro to a six-week low versus the greenback. The euro fell as low as $1.41230, breaking below a key level at $1.4150, which technical analysts said leaves open the prospect of further falls towards $1.40. However, traders said bids above $1.4100 could limit falls for now. Near term support is seen near its April 1 low of around $1.4060. The single currency was also weighed by euro zone periphery woes, as concerns increased that Greece's debt burden may be unsustainable. The euro also hit a six-week low against the yen. The Australian dollar and other commodity currencies did not react to China's move to increase reserve ratios, although analysts warned this could add to the risk-off attitude in markets. Steep losses in commodity prices -- with silver tumbling more than 7 percent and oil down around 2.3 percent after falling overnight -- as well as weak equities encouraged traders to cut exposure to riskier currencies. more
