FOREX-U.S. crude-oil crash keeps dollar in demand

* Dollar up 0.5% on week so far
* March shopping surge lifts Aussie
* Oil recovery does little salve to investor sentiment
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates prices, commentary)
By Elizabeth Howcroft
LONDON, April 22 (Reuters) - The dollar and yen remained
strong in early London trading on Wednesday after oil prices
recovered from another slump, keeping demand for safe-haven
currencies strong even as markets began to stabilise.
The dollar was flat against a basket of comparable
currencies, =USD , still up around 0.5% on the week so far as
investors sought safety amid market turmoil. The Japanese yen
maintained its gains from the past week versus the dollar, up
around 0.2% JPY=EBS .
Oil prices fell again in overnight trading on Wednesday,
with Brent falling to its lowest since 1999, amid a collapse in
demand for everything from gasoline to jet fuel caused by the
coronavirus outbreak and lockdown measures designed to contain
it. U.S. crude oil futures turned negative on Monday for the
first time in history, as desperate traders paid to get rid of
oil. "The recent distortions on the oil market are less likely to
be the cause but instead the trigger for the market to reveal
its worst fears regarding the economic extent of the corona
crisis," wrote Commerzbank senior FX analyst Thu Lan Nguyen in a
note to clients.
Oil-driven economies suffered -- the Norwegian crown was
close to its lowest in nearly a month against the dollar
NOK=D3 , although it recovered around 0.2% in early London
trading. The Canadian dollar was less affected, up 0.3% versus
the dollar CAD=D3 on Wednesday.
"The fact that despite the renewed collapse of the oil price
the Canadian dollar's losses are limited is unlikely to be seen
as an entirely positive development domestically," wrote
Commerzbank's Nguyen.
"A weaker currency would be quite helpful to cushion the
negative economic effects of the collapsing oil price at least
partially," she said.
The euro remained range-bound before an EU meeting tomorrow
to discuss financial aid in the euro zone. It was last at
$1.08665 EUR=EBS .
The Australian dollar was up 0.8% after a record surge in
retail sales last month, spurred by panic buying AUD=D3 .
The recovery in U.S. crude CLc1 lifts it out of negative
territory, but at around $11 a barrel, it is still some 80%
under January's peak.
The plunge has soured appetite for risk and seems to have
halted a rebound in stock markets as investors look towards a
longer and slower global economic recovery. A return to work in the United States -- the country hardest
hit by the virus, accounting for about a quarter of the almost
180,000 deaths globally -- is looking disorderly as states and
medical experts clash about the best course of action.