- Oil pares gains as Trump okays emergency oil reserve use
- Safe-haven yen, Swiss franc trim initial increases
- Currencies of oil exporters Norway, Canada gain
- Short-covering seen lifting greenback before Fed meeting
- Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, changes dateline, previous LONDON)
The dollar rose against a basket of currencies on Monday as U.S. President Donald Trump's authorization of the use of an emergency crude stockpile in response to drone attacks on Saudi Arabian refining facilities cooled a surge in oil prices.
The Japanese yen and Swiss franc, both traditional safe-haven currencies, gave up much of their initial gains with a pullback in crude prices and anxiety about a disruption in global energy supply, analysts said.
Still, investors remained nervous about another attack, which underpinned demand for currencies of oil exporters such as Norway and Canada.
"The market took it yet with another shrug," said Boris Schlossberg, managing director of FX strategy with BK Asset Management in New York. "If you see another attack, there might be another reaction."
Oil prices had jumped as much as 19% in reaction to the drone strikes, which knocked out more than 5% of global oil output. Yemen's Iran-aligned Houthi group claimed responsibility, but the United States has blamed Tehran.
On Sunday, Trump said he had authorized the release of oil from the U.S. Strategic Petroleum Reserve (SPR) if needed in a quantity to be determined. He also said Washington was "locked and loaded" to retaliate for the attacks on the Saudi facilities.
Another factor boosting the greenback was some exiting of bearish dollar bets in advance of the U.S. Federal Reserve's two-day policy meeting. Traders widely expect the Fed will cut interest rates by a quarter of a percentage point this week.
In July, Fed policymakers lowered short-term rates for the first time since 2008.
"The market wants to short-cover in front of the Fed if the Fed doesn't cooperate," Schlossberg said.
On the other hand, speculators trimmed their bullish bets on the dollar, according to the latest data from the Commodity Futures Trading Commission.
At 11:31 a.m. (1531 GMT), an index that tracks the greenback against the euro, yen, sterling and three other currencies .DXY was up 0.38% at 98.63. It touched its lowest level since Aug. 27 on Friday.
The dollar JPY=EBS was -0.05% lower at 108.045 yen, recovering from an earlier low of 107.44 during Asian trading.
The greenback CHF=EBS fell to 98.655 Swiss francs before reversing to trade at 99.29, up 0.29% on the day.
Among currencies tied to oil-exporting countries, the Norwegian crown NOK=D3 strengthened to 8.9179 per dollar earlier before retreating to 8.965.
The Canadian dollar CAD=D3 rose 0.3% to C$1.3249 after earlier reaching C$1.3208.
The Russian ruble RUB= was 0.3807% higher. Sterling, which has soared over the past week on growing investor confidence that a no-deal Brexit is off the table, fell back from a two-month high to $1.2418 GBP=D3 , down 0.68% on the day. It was little changed against the euro to 88.565 pence EURGBP=D3 .
======================================================== Currency bid prices at 11:32AM (1532 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.0996 $1.1073 -0.70% -4.12% +1.1091 +1.0994 Dollar/Yen JPY= 108.0500 108.0700 -0.02% -2.00% +108.0900 +107.4800 Euro/Yen EURJPY= 118.84 119.69 -0.71% -5.85% +119.5000 +118.7000 Dollar/Swiss CHF= 0.9928 0.9902 +0.26% +1.16% +0.9939 +0.9866 Sterling/Dollar GBP= 1.2415 1.2500 -0.68% -2.68% +1.2509 +1.2400 Dollar/Canadian CAD= 1.3247 1.3283 -0.27% -2.86% +1.3270 +1.3207 Australian/Doll AUD= 0.6864 0.6877 -0.19% -2.62% +0.6884 +0.6855 arEuro/Swiss EURCHF= 1.0919 1.0961 -0.38% -2.98% +1.0964 +1.0915 Euro/Sterling EURGBP= 0.8855 0.8858 -0.03% -1.44% +0.8902 +0.8850 NZ NZD= 0.6355 0.6375 -0.31% -5.39% +0.6391 +0.6351 Dollar/DollarDollar/Norway NOK= 8.9644 8.9860 -0.24% +3.77% +8.9892 +8.9179 Euro/Norway EURNOK= 9.8589 9.9515 -0.93% -0.48% +9.9299 +9.8607 Dollar/Sweden SEK= 9.6751 9.6075 -0.01% +7.94% +9.6918 +9.5968 Euro/Sweden EURSEK= 10.6413 10.6422 -0.01% +3.68% +10.6760 +10.6348
