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.
The plan also faced major hurdles with Iran absent from the talks and likely determined to raise production. The dollar fell 0.6 percent against the yen to 113.84 yen, reversing earlier gains. It had risen more than 1 percent against the Japanese currency on Monday. It had 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. "A lot of the rally you saw late last week and into this morning was on renewed optimism that there would be some sort of production cut," said Matt Perrier, a managing director of fixed income, currencies and commodities at BMO Capital Markets.
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 Great Britain might leave the euro zone. Sterling fell 1 percent against the dollar to $1.4283. The dollar also benefited from a rise in US stock markets and leftover optimism from Friday's gains. The S&P 500 rose 1.5 percent on Tuesday after gaining nearly 2 percent on Friday. "Yesterday was a relatively good risk day that the US 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," said John Doyle, director of markets at Tempus Inc. Markets in the United States were closed for the Presidents Day holiday. The euro fell 0.1 percent against the dollar to $1.1140. The dollar rose against the Swiss franc, gaining 0.15 percent to 0.9881 franc.