(RTTNews) - In early European deals on Wednesday, the U.S. dollar plummeted against its major counterparts on the back of higher oil prices.
The dollar fell to a 1-week low against the yen, while it eased from a multi-month high against the pound and new multi-week highs against the franc and the euro.
Oil rose above $73 per barrel today after several days of falls, supported by industry data showing a big drop in U.S. crude stocks.
The American Petroleum Institute (API) said in a report late on Tuesday that crude inventories in the world's top oil consumer fell 5.8 million barrels last week, bucking expectations for a rise, as refiners boosted fuel production.
U.S. crude for January delivery rose 88 cents to $73.50 per barrel at 3:56 am ET, after falling $1.31 on Tuesday. NYMEX crude, which hit its lowest level since late November at $72.43 on Monday, has lost more than 7 percent this month.
London Brent crude gained 78 cents to $75.97.
Losses over the last five days have been partly driven by a recovery in the dollar. Oil is priced in dollars so a rise in the currency makes fuel more expensive to most consumers.
U.S. crude oil futures surged to a year high of $82 per barrel in October, from below $33 last December.
The dollar plunged to a 1-week low of 87.38 against the yen at 3:50 am ET Wednesday. The next downside target level for the dollar is seen at 84.4. At yesterday's North American session, the dollar-yen pair was quoted at 88.41.
Japan's gross domestic product expanded by just 0.3% in the third quarter of 2009 compared to the previous three months, the Cabinet Office said today in its final report. That was well below analyst expectations for a 0.7 percent quarterly increase following the 1.2 percent expansion in last month's preliminary report.
On an annual basis, GDP was up 1.3 percent - again missing expectations for a 2.8 percent increase after the preliminary report showed a 4.8 percent jump.
At 4:35 am ET Wednesday, the dollar touched 1.4768 against the euro and 1.0232 against the Swiss franc, falling from early Asian session's new multi-week highs of 1.4670 and 1.0294, respectively. If the dollar weakens further, it may target 1.490 against the euro and 0.997 against the franc. The euro-dollar pair closed trading at 1.4702 and the dollar-franc pair at 1.0273 on Tuesday.
The euro remained higher against the dollar today as the German trade surplus increased more than expected in October. The German trade surplus increased to EUR 13.6 billion in October, the Federal Statistical Office reported. The surplus stood above the expected EUR 10.7 billion and September's revised surplus of EUR 10.4 billion.
