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Kiwi rises to 2-month high on higher yields
Risk sentiment was low on Tuesday, which helped support he safe haven yen. USD/JPY dipped 0.1 percent to 120.26 yen. It edged closer to a two-month low of 120.05 plumbed last week as weaker oil sapped investor risk appetite. The dollar was on track to eke out a 0.5 percent gain against the yen this year.
Meanwhile, weak oil prices can push down dollar/yen by continuing to negatively impact high yield bonds, which in turn will worsen overall risk sentiment. Prices of both Brent and U.S. crude remained under pressure on Tuesday after dropping more than 3 percent on Monday, overnight, reversing a brief rebound as concerns over oversupply returned. Brent slipped back towards an 11-year low.
As a result of weaker oil prices, the Canadian dollar struggled near 11-year low versus the greenback. The loonie edged up slightly to C$1.3876 to the USD after losing 0.7 percent overnight, when it went as low as C$1.3915. The loonie still remained in striking distance of an 11-year low of C$1.4003 against the dollar hit earlier this month.
The Australian dollar, another commodity currency, stood little changed at $0.7258 after touching a five-day low of $0.7246.
The euro gained 0.1 percent to $1.0988 but is confined to a narrow $1.0944-1.1000 range over the past three sessions.
The Kiwi climbed to a 2-month high on the back of higher yields. NZD/USD hit $0.6866 as the allure of relatively high New Zealand yields have recently shored up the kiwi, though it was still headed for a 12 percent drop versus the greenback in 2015.
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