Investing.com - The yen slid on Tuesday and the currencies of commodity exporting nations gained as oil prices recovered following a steep slide in the previous session, boosting investor sentiment.
USD/JPY was up 0.49% to 109.33, up from Monday’s one-week lows of 107.82.
Oil prices rose on Tuesday, as a strike by oil workers in Kuwait slashed the country’s output levels and overshadowed a deadlock between Iran and Saudi Arabia on a mooted production freeze intended to prop up prices.
The recovery in oil prices helped drive global equities higher, with European stocks hitting three month highs.
Fears over an intervention by Japanese officials to weaken the yen kept investors cautious on the currency.
Japan’s Finance Minister Taro Aso said Tuesday he would take “various measures” against excessive currency moves and added that rapid currency moves are unwelcome.
The U.S. dollar fell to lows of 1.2740, levels not seen since July, against the oil-linked Canadian dollar and the pair was last at 1.2762.
The Australian dollar hit highs of 0.7803 and was last at 0.7777, up 0.37% for the day, while NZD/USD advanced 0.91% to 0.7011.
The euro moved higher against the dollar, with EUR/USD up 0.24% to 1.1338.
The euro was also higher against the yen, with EUR/JPY advancing 0.71% to 123.97.
The single currency found support after data showing that German economic sentiment continued to improve this month.
The ZEW economic sentiment index for Germany rose to 11.2 in April from March’s reading of 4.3, beating forecast of 8.0.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.13% to 94.33.
The outlook for future U.S. interest rates increases remained clouded after Boston Fed President Eric Rosengren warned Monday that rates could increase more rapidly than investors currently expect.
Lower interest rates make the dollar less attractive to yield seeking investors.
Separately, New York Fed President William Dudley warned that the U.S. central bank is likely to stick to a cautious approach on tightening monetary policy.