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FOREX-Dollar up broadly as oil drop hits Aussie

Published 06/14/2009, 08:27 PM
Updated 06/14/2009, 08:32 PM

* Aussie down 0.7 pct after oil drops late last week

* No surprises from G8 finance ministers' meeting - traders

* Some focus on first BRIC summit on Tuesday

By Satomi Noguchi

TOKYO, June 15 (Reuters) - The dollar rose broadly on Monday as a drop in oil prices late last week prompted investors to buy the greenback and take profits from recent gains in commodity-linked currencies such as the Australian dollar.

Traders said the outcome of the Group of Eight finance ministers' meeting at the weekend did not offer any surprises and the focus has shifted to oil and stocks for near-term direction.

The G8 nations, heartened by signs the credit crisis is easing, have started to consider how to unwind rescue steps for their economies, their finance ministers said on Saturday.

But they also warned there must be firmer signs of recovery before any of the massive public stimulus for the economy is withdrawn.

"The G8, as expected, did not lay out the details of the exit strategies for their crisis policies," said Kosuke Hanao, head of treasury product sales at HSBC in Tokyo.

"What lifted the dollar last week was the drop in oil prices. But it remains to be seen whether such moves in oil and the dollar will continue as the main factors" affecting the market, Hanao said.

The dollar drew some support from comments from Russian Finance Minister Alexei Kudrin, who said the dollar's role as the world's main reserve currency is unlikely to change in the near future.

Kudrin's remarks came ahead of the first summit of leaders of Russia, China, India and Brazil on Tuesday in the Urals city of Yekaterinburg, at which the leaders are expected to discuss issues including foreign reserve diversification.

But leaders of the so-called BRIC nations do not plan to discuss prospects for new global reserve currencies at their meeting, a top Kremlin aide said, easing some concerns about the dollar's status as the world's reserve currency.

The euro dropped 0.3 percent to $1.3976 after data on Friday showed a plunge in euro zone industrial production in April, cutting demand for the euro.

The Australian dollar fell 0.7 percent to $0.8080, retreating further from a eight-month high of $0.8265 struck earlier this month.

The dollar was nearly flat at 98.43 yen, while the euro fell 0.3 percent to 137.56 yen. (Editing by Chris Gallagher)

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