The dollar was subdued on Wednesday as traders took stock of nervous markets after the U.S. currency's advance against its major rivals stalled amid crumbling crude oil prices and concerns about the global economy. The dollar stood flat at 117.645 yen. The greenback had risen as far as 118.115 overnight on a bounce in battered crude oil prices, but it gave up those gains after the rise in the commodity proved temporary. The dollar also slipped against the Swiss franc, another safe haven.
“The performance of equities, particularly Wall Street, dictates the direction of dollar/yen. Equities have developed a relatively strong correlation with crude, and if the fall by the commodity should continue, we could see dollar/yen slip below 116.00 soon," said Junichi Ishikawa, market analyst at IG Securities in Tokyo. The greenback will look for potential relief in the U.S. housing, construction and consumer price data due later in the session. Upbeat numbers could help shore up prospects of the Federal Reserve hiking interest rates again and support the dollar. Sterling struggled near a seven-year low after being hit overnight by dovish comments from Bank of England Governor Mark Carney. The BOE head said he had no set timetable for raising interest rates, warning of more damage to come from a slowing Chinese economy.
Asian share markets slipped early Wednesday as a relentless slide in oil prices wiped out an attempted rally on Wall Street and dealt a fresh blow to risk appetite. U.S. crude wallowed at its lowest since 2003 after the world's energy watchdog warned the market could "drown in oversupply". U.S. crude futures CLc1 shed another 49 cents to a new trough at $27.97 in early trade, while Brent crude LCOc1 was quoted at $28.76 a barrel. Equity markets reacted by reversing some of Tuesday's rare gains, and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.3 percent. Japan's Nikkei .N225 fell 0.7 percent, while Australian stocks .AXJO lost 0.4 percent.