CURRENCIES: Dollar Advances Vs. Yen As Oil Prices Climb

By Joseph Adinolfi and Barbara Kollmeyer, MarketWatch Features Dow Jones Newswires

But greenback recovers some ground against the yen

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The dollar turned higher against its Japanese rival on Wednesday after an industry group said U.S. crude supplies fell by nearly six million barrels last week.

The shift helped draw investor attention to the commodity market, where fears of persistent supply overruns have stoked concerns that the Organization of the Petroleum Export might abandon its short-lived arrangement to cut production quotas. OPEC members will gather in Vienna later this month for a regular biannual meeting.

The dollar was up 0.1% at Yen114.13 in recent trade; meanwhile, West Texas Intermediate crude futures for June delivery rose 3% to $46.32. One dollar bought Yen113.98 late Tuesday in New York. Rising oil prices helped bolster the Russian ruble and other oil sensitive currencies like the Brazilian real . Both countries are large oil exporters.

Earlier in the session, escalating political worries helped weigh on the greenback after President Donald Trump abruptly fired FBI Director James Comey. The news benefited the yen, a popular safety play, by "[reminding] the street that the current political environment in the US is unpredictable and that being complacent is dangerous," said Colin Cieszynski, chief market strategist at CMC Capital Markets, a retail foreign-exchange brokerage.

The overall reaction to Comey's firing was muted, however, with U.S. stocks off slightly.

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Read:Here's why the stock market isn't freaking out about the Comey firing (http://www.marketwatch.com/story/heres-why-the-stock-market-isnt-freaking-out-about-the-comey-firing-2017-05-10)

While news of Comey's appeared to monopolize the headlines, investors were also alarmed by North Korean officials' claim that they plan to move ahead with their sixth nuclear missile test.

In addition, investors are "backing away from hopes that the U.S. economy will see 3% growth this year, as some forecasts had suggested, as wage growth declined slightly last month, while other hard data like measures of business activity have continued to lag sentiment indicators," Foley said.

The ICE Dollar Index shed 0.1% at 99.59, but was off an intraday low of 99.37.

The greenback also erased earlier declines against its main European rivals. The pound was flat at $1.2938 in recent trade, while the euro moved lower to $1.0870, compared with $1.0872 late Tuesday in New York.

(END) Dow Jones Newswires

May 10, 2017 12:46 ET (16:46 GMT)