🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

FOREX-Oil-linked currencies' sell-off intensifies

Published 09/12/2015, 02:39 am
Updated 09/12/2015, 02:40 am
© Reuters.  FOREX-Oil-linked currencies' sell-off intensifies
EUR/USD
-
USD/JPY
-
USD/CAD
-
LCO
-
CL
-
DXY
-

* Dollar hits decade-plus highs against loonie, Norwegian crown

* Worries about China pressure export-oriented currencies

* Oil posts fresh near 7-year lows after Monday's 6 percent drop (Updates to U.S. trading; changes byline, dateline; previous London)

By Richard Leong

NEW YORK, Dec 8 (Reuters) - The Canadian dollar, Norwegian crown and currencies of other major oil exporters fell on Tuesday, hitting decade-plus lows versus the dollar as concerns about an oil supply glut and soft global demand sent crude prices to near seven-year lows.

Growth-oriented currencies such as the Australian dollar also remained on the defensive after Chinese trade data for November did little to soothe concerns about China's economic slowdown.

Falling oil and weak metal prices underpinned bets central banks of export-reliant economies would embark on more stimulus to weaken their currencies in a bid help exporters.

"It's a perfect storm for commodity currencies," said Mazen Issa, senior currency strategist at TD Securities in New York.

He added high expectations the Federal Reserve would raise U.S. interest rates for the first time in nine years have been the other key factor that has hurt commodity-linked currencies.

Fed policy-makers meet next Tuesday and Wednesday.

The dollar, while stronger against commodity currencies, retreated against the euro and the yen. The weak outlook on oil, metal and other key exports has hurt stock prices worldwide, reducing the greenback's allure against these major currencies.

The euro gained 0.4 percent at $1.0878 EUR= , while the dollar fell 0.5 percent at 122.77 yen JPY= .

The dollar against a group of major currencies was down 0.2 percent at 98.437 .DXY .

On the flip side, the dollar touched C$1.3623, its strongest against its Canadian counterpart since mid-2004. It rose 1.5 percent versus the Norwegian crown, touching 8.8194 crowns, its highest since April 2002.

"With oil prices falling and some even talking about oil falling to $30 a barrel, revenues for these countries will take a beating and hence their currencies will remain under pressure," said Jeremy Stretch, head of currency strategy at CIBC World Markets in London.

U.S. crude prices fell to their lowest since early 2009, last down 0.4 percent at $37.51 a barrel CLc1 . Brent futures LCOc1 in London fell as low as $39.81 to their lowest since February 2009. On Monday, they had tumbled 6 percent and touched their lowest since February 2009.

The Australian dollar fell 0.8 percent to $0.7209 as this week's tumble in iron ore prices and the latest Chinese data weighed on the currency's woes.

On Tuesday, spot iron ore fell to a decade low below $40 a tonne, bringing the year-to-date drop to 45 percent.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.