The dollar was down against most of its primary trading partners on Tuesday, starting the year lower after hitting a three-month low on Friday, the last trading day of 2017. The greenback closed the year down 9.8 percent, its worst performance since 2003. Not surprisingly, the euro saw its strongest year against the dollar since 2003.
As of 1:41 p.m. HK/SIN, the euro was trading up 0.08 percent against the dollar, to $1.2018. The British pound was up 0.11 percent against the greenback, to $1.3515, and the dollar slid 0.09 percent against the Canadian dollar. The dollar’s only gain by Tuesday afternoon in Asia was against the yen, where it traded at 112.70, a modest 0.05 increase. Traders are now eyeing tomorrow’s release of the minutes from the December meeting of the Federal Reserve where interest rates were raised despite opposition from two key policymakers.
Dollar-Linked Commodities Head Higher
The weakness of the dollar has helped boost commodities that are linked to the currency, with gold, copper and aluminum benefitting significantly. Gold gained 13 percent in 2017, its best performance in seven years. It was trading $1,308.70 per ounce on Tuesday afternoon. Copper closed up 31 percent in 2017, hitting a four-year top before retreating slightly on Tuesday. Aluminum gained 34 percent on the year in 2017.
Brent crude futures ended the year with a 17 percent price increase, supported by increased demand and reduced global stocks, caused partly by OPEC’s intense efforts to reduce output. Brent was up 0.39 percent on the first trading day of 2018, to $67.13 per barrel. U.S. WTI futures were up 0.40 percent to $60.66 per barrel.