* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Oil turmoil rattles FX market
* Coronavirus threatens global energy demand
* Euro looks to policymakers for fiscal response
By Stanley White
TOKYO, April 23 (Reuters) - The dollar erased gains and fell
against the currencies of oil producers on Thursday, as a
rebound in crude prices after an unprecedented collapse helped
to calm markets unnerved by the massive coronavirus-led drop in
global demand.
The euro held steady against the greenback and the pound
ahead of a meeting of European Union officials on the bloc's
response to the economic turmoil caused by the global
coronavirus pandemic.
It may take EU countries until the summer or even longer to
agree on how exactly to finance aid to help economies recover
as major disagreements persist, a bloc official said on
Wednesday. The greenback initially shrugged off the rebound in oil
prices because the gains were slight. However, the dollar lost
strength as oil futures extended gains, which decreases the
safe-haven appeal of holding funds in dollars.
"The dollar-oil trade meant that the dollar rose when
commodities fell, but this dynamic is starting to not work,"
said Masafumi Yamamoto, chief currency strategist at Mizuho
Securities in Tokyo.
"The dollar is not strong against other currencies. This
shows that the foreign exchange market, at least, is starting to
stabilise."
Against the Norwegian crown NOK= , the U.S. currency gave
up gains to fall 0.7% to 10.6894 as oil prices rose, pulling
back from a one-month high reached on Wednesday.
The greenback fell 0.8% to 75.38 Russian rubles RUB= on
Thursday.
The U.S. dollar edged lower against the Canadian dollar
CAD= to C$1.4134 following a 0.3% decline on Wednesday.
The greenback initially rose against the Mexican peso
MXN=D3 but then reversed course and fell to 24.3850,
retreating from a two-week high.
U.S. West Texas Intermediate (WTI) futures CLc1 rose
10.16% to $15.18 a barrel on Thursday. On Monday, front-month
WTI futures plunged to a historic low to more than minus $37 as
a glut of oil and dwindling capacity to store it sent oil prices
into a tailspin. O/R
Brent crude LCOc1 also rose 11.83% to $22.78 a barrel,
bouncing back from its lowest level since June 1999.
These gains pale against persistent investor concerns about
the collapse in demand for oil, as major economies have been
brought to a virtual standstill with stay-at-home rules and
severe restrictions on businesses and travel aimed at limiting
the spread of the coronavirus.
Countries are running out of space to store the oil that
they are not using, which could lead to further disruptions for
commodities and other markets.
Officials from the EU will discuss the bloc's response to
the economic damage caused by the coronavirus later on Thursday.
However, markets are wary because it is uncertain how far EU
governments will cooperate in financing the recovery from what
is sure to be a deep recession. Ahead of the outcome of the meeting, the euro EUR=EBS held
steady at $1.0828. Against the pound EURGBP=D3 , the common
currency was little changed at 87.62 pence.
The European Central Bank has agreed to accept junk bonds as
collateral to allow banks to finance themselves at the ECB,
which should be a positive factor for the euro, but investors
are waiting for details on the fiscal response. The dollar was little changed versus the yen as the pair
remains stuck in a holding pattern.
The greenback last traded at 107.78 yen JPY=EBS .
The Australian dollar AUD=D3 recovered from an early
decline to rise 0.23% to $0.6339 as the greenback weakened
against other currencies linked to the global commodities trade.
The New Zealand dollar NZD=D3 also rose 0.37% to $0.5979.
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Volatility for oil producers' currencies IMAGE https://tmsnrt.rs/2VRMBwN
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(Editing by Shri Navaratnam and Jacqueline Wong)