Dollar slips in holiday-thinned trade; loonie, ruble ride oil gains

NEW YORK (Reuters) - The dollar edged lower against a basket of currencies in thin holiday-impacted trading on Monday, while a jump in the price of oil on news Washington plans to tighten a clampdown on Iranian oil exports in May boosted the Canadian dollar and the Russian ruble.

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The dollar index, which measures the greenback against six major currencies, was 0.2% lower at 97.283. The index hit a two-week high of 97.485 late last week.

Against the Japanese yen the dollar was about flat, while the euro was 0.11% higher against the greenback.

Financial markets in Australia, Hong Kong and many major countries in Europe were closed on Monday for the Easter holiday. Currency trading continued globally but volume was expected to be light.

“With much of the market still out on Easter and Passover related holidays there is not a whole lot to chew on to start the week,” said Brad Bechtel, global head of FX at Jefferies, in New York.

The dollar found little support from data that showed U.S. home sales fell more than expected in March amid supply constraints.

The greenback has firmed in recent weeks on the back of a gradual rise in U.S. 10-year Treasury yields and signs of strength in the world’s top economy, including better-than-expected retail sales in March, following a weak start to the year.

Traders will be keenly watching the U.S. GDP report due Friday for further clues on the health of the U.S. economy, analysts said.

On Monday, crude oil prices were the biggest driving force in currency markets, analysts said.

Oil prices jumped 3% to a near six-month high on growing concern about tight global supplies after Washington said it will eliminate in May all waivers allowing eight economies to buy Iranian oil without facing U.S. sanctions.

With the jump in the price of oil, one of Canada’s major exports, the Canadian dollar rose 0.4% against its U.S. counterpart.

The ruble hit its highest level against the euro in more than a year, and a one month-peak versus the dollar, driven by the jump in oil and local month-end taxes that boost demand for the Russian currency.

Sterling was a shade lower at 1.2981, dipping below the $1.30 handle and nearly 0.4 percent off a two-month low of $1.2945 hit last month. The currency is now at its least volatile in years as investors await a breakthrough in Britain’s European Union divorce process.

(GRAPHIC-World FX rates in 2019 link:

Reporting by Saqib Iqbal Ahmed; Editing by Tom Brown