The U.S. Dollar fell slightly in morning trading in Sydney because of the public holidays on Monday in the United States and the United Kingdom, coupled with the negative effect of high oil prices on the U.S. currency.
On May 26, 2008 at 10:00 am (00:00 GMT) in Sydney, the U.S. Dollar traded at 103.40 Yen, compared to 103.43 Yen, while the Euro traded at $1.5781, compared to $1.5770 in late trading in Europe.
According to some analysts, the short term direction of the U.S. Dollar will depend largely on oil prices. Recent surge in prices of crude oil have triggered concerns that the weak U.S. economy will face more pressure because consumers will have to pay higher fuel bills. This will cause a drop in the equity market and safe haven buying activities in the currency markets, which will benefit the Swiss Franc and the Japanese Yen.
Following disruption of crude oil operations in Nigeria, concerns about supply of oil caused the price of crude oil quoted for July to rise to $133.45 per barrel, a record high on the N.Y. Mercantile Exchange.