Dollar falls against commodity currencies on extended sentiment

The dollar fell against commodity currencies on Tuesday on expectations for additional gains in the price of oil and metals.

Against the loonie, the dollar stood at 1.2097, near its lowest in over three years. The dollar also fell to a near two-week trough against the Mexican peso.

The Aussie climbed to $0.7836, close to an 11-week high. The kiwi was quoted at $0.7267, close to its highest level since late February.

Investors are expecting commodities demand to increase as COVID-19 vaccine programmes allow more countries to return to normal economic activity.

Supply constraints for several commodities also suggest that prices could stay elevated for an extended period, making some commodity currencies performing well against the dollar.

The pound stood at $1.4130, near its strongest since Feb. 25 as Britain reopens its economy. The euro rose to 1.2137 against the dollar, while the yen was flat at $108.87.