[NEW YORK] The US dollar edged higher against the euro and slipped against the Canadian dollar on Tuesday as a surge in oil prices to 2016 highs whetted risk appetites and boosted commodity-linked currencies.
Oil prices surged amid speculation that a meeting of Opec and non-Opec producers Sunday in the Qatari capital of Doha could produce some measure of relief to the global oil glut.
The US dollar rose to US$1.1386 per euro around 2100 GMT, down from US$1.1406 at the same time on Monday.
The oil rally boosted the Canadian dollar, which has been suffering from the commodity's sharp decline since mid-2014.
The dollar fell one percent to C$1.2768 ahead of the Bank of Canada's interest-rate decision Wednesday. The central bank is expected to keep unchanged its key lending rate at a low 0.5 per cent.
Both the dollar and the euro rose against the yen on reports that Japan's finance minister, Taro Aso, said officials were ready to take action as needed if there were more extreme movements in the foreign exchange market.
"The Abe government faces increasing pressure to act, since the rising yen threatens the record-high corporate profits of recent years, perhaps Abenomics' main achievement," Tobias Harris, a vice-president at Teneo Intelligence, said.
Hideo Kumano, chief economist at Dai-ichi Life Research Institute, dismissed the possibility of currency intervention with Japan set to host the Group of Seven summit next month.
"Japan's position will weaken" diplomatically if it intervenes in forex markets, said Mr Kumano.
The pound rose to US$1.4274 amid signs of inflation heating up ahead of the Bank of England's meeting Thursday, with consumer prices rising a more-than-expected 0.5 per cent in March.
The news "was supportive of views that the next move in interest rates would be upward," said Joe Manimbo of Western Union Business Solutions.