Commodity currencies propelled by crude oil price rally

Australian and Canadian dollars rose today. — AFP pic
Australian and Canadian dollars rose today. — AFP pic

LONDON, April 9 — The Australian and Canadian dollars rose today, aided by a surge in oil prices to five-month highs that lifted most commodity-linked currencies.

Oil prices have rallied on expectations that global supplies would tighten due to fighting in Libya, Opec-led cuts and US sanctions against Iran and Venezuela, although energy prices slipped slightly today.

The Australian dollar rose 0.3 per cent to US$0.7151 (RM2.93) after earlier touching a three-week high.

Canada’s currency firmed to C$1.3293 (RM4.09), its strongest since March 21.

Societe Generale analyst Kit Juckes noted that while oil exporter currencies including the Russian rouble, Mexican peso, Canadian dollar and Norwegian crown were all performing well, significant importer nation currencies like the lira, Korean won and rupee had suffered.

“I wouldn’t want to push this theme too far but we’ll stay long NOK against EUR and USD,” he wrote in a daily note.

Foreign exchange moves elsewhere were limited tomorrow. The fell for a second consecutive day while Washington’s proposed list of tariffs on European goods had no immediate impact on the euro.

Analysts, however, said they did not expect that to last.

“Even if these tariffs are going to have limited overall real economic impact they would nonetheless come at a bad moment, as the euro zone economy is already weakening,” Commerzbank analyst Thu Lan Nguyen said.

“Any additional headwinds would further dampen the prospect of a rapid recovery and fuel speculation about further ECB measures. The euro is likely to continue struggling in this environment.”

The euro rose 0.1 per cent to US$1.1275 with traders also preparing for Wednesday’s European meeting.

The dollar slipped 0.1 per cent to 96.915, its second day of losses.

Sterling jumped beyond US$1.31 on a media report that German Chancellor Angela Merkel was willing to put a five-year limit on the Northern Ireland backstop proposal, in a move that could help convince eurosceptics to back British Prime Minister Theresa May’s deal and help end a deadlock over Brexit.

The Norwegian crown strengthened 0.1 per cent to 8.5335 per dollar after rallying 0.7 per cent on Monday thanks to the higher . It was also marginally up versus the euro .

The crown was also boosted after Norges Bank Governor Oeystein Olsen said on Monday that policymakers would continue to hike interest rates over the coming months, putting the bank in contrast to most that have pledged to keep rates low for longer in the face of weakening economic momentum.

The Japanese yen gained 0.2 per cent to ¥111.325 (RM4.1) per dollar. — Reuters

Source: The Malay Mail Online

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