Dollar rises against most majors, but falls vs yen as oil accord disappoints

The U.S. dollar has regained some strength in recent weeks.
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The U.S. dollar has regained some strength in recent weeks.

The dollar rose against most major currencies on Tuesday as an agreement between the world's top oil producers increased investors' appetite for risk.

However, the Japanese yen rose against the dollar as the deal left some investors unsatisfied and buying the safe-haven currency.

Crude oil futures initially surged after the agreement between top producers Saudi Arabia and Russia, but fell after it was revealed that the accord was only to freeze output at January levels, and only with agreement from other major exporters.

Saudi, Russian, Qatari and Venezuelan oil ministers said the plan was contingent on other producers joining in, a major sticking point with Iran absent from the talks and determined to raise production.

The dollar fell 0.56 percent against the yen to 113.90 yen, reversing earlier gains. The dollar had risen more than 1 percent against the yen on Monday and has gained more than 3 percent since hitting a 15-month low on Thursday, as investors' nerves were calmed a touch by a recovery in equities and oil prices.

"Some had expected the agreement between Saudi Arabia and Russia to come out with cutting oil production," said John Doyle, director of markets at Tempus in Washington.

"The people that were expecting that didn't get it, so you're getting a little bit of a risk-off play on that front."

The dollar did, however, rise against other major currencies, including to a two-week high against the British pound. Poor manufacturing numbers battered sterling on Tuesday, and the currency has struggled so far in 2016 because of worries that Great Britain might leave the euro zone.

Sterling fell 1 percent against the dollar to $1.4291.

The dollar also benefited from higher U.S. stock markets and leftover optimism from Friday's positive gains. The S&P 500 rose more than 1 percent Tuesday after gaining nearly 2 percent on Friday.

"Yesterday was a relatively good risk day that the U.S. markets didn't get to take advantage of, so you're going to see a little bit of lingering of that in today's trade as well," Doyle said.

Markets in the United States were closed for the Presidents Day holiday.

The euro fell 0.2 percent against the dollar to $1.1143.

The dollar also rose against the Swiss franc, gaining 0.2 percent to 0.9882 franc.