Commodity currencies like the Australian and New Zealand dollars soared to 10-month highs against the U.S. dollar, drawing support from oil prices which stabilized from a slide and underpinned broad risk sentiment in global markets.
The Australian dollar AUD=D4 rose to $0.7803, its highest since last June and up 0.6 percent on the day. Similarly, the New Zealand dollar NZD= jumped 1 percent to $0.7028, its highest in 10 months.
The oil-linked Canadian dollar CAD=D4 hit its highest since July last year as crude bounced from lows touched on Monday, having come under pressure after major oil-producing countries failed to agree on an output freeze on Sunday.
Brent futures LCOc1 were higher at $43.75 a barrel, holding well above Monday’s low of $40.10. Oil prices had edged higher earlier on Tuesday, supported by a Kuwaiti oil industry strike that has led to a cut in the country’s oil production.
“It is quite amazing how oil prices have recovered from Monday’s lows. That is shoring up risk appetite and pushing up commodity-linked currencies,” said Niels Christensen, FX strategist at Nordea. “As long as oil remains above $43 a barrel we think commodity currencies will remain supported.”
via Commodity currencies like the Australian and New Zealand dollars soared to 10-month highs against the U.S. dollar, drawing support from oil prices which stabilized from a slide and underpinned broad risk sentiment in global markets.
The Australian dollar AUD=D4 rose to $0.7803, its highest since last June and up 0.6 percent on the day. Similarly, the New Zealand dollar NZD= jumped 1 percent to $0.7028, its highest in 10 months.
The oil-linked Canadian dollar CAD=D4 hit its highest since July last year as crude bounced from lows touched on Monday, having come under pressure after major oil-producing countries failed to agree on an output freeze on Sunday.
Brent futures LCOc1 were higher at $43.75 a barrel, holding well above Monday’s low of $40.10. Oil prices had edged higher earlier on Tuesday, supported by a Kuwaiti oil industry strike that has led to a cut in the country’s oil production.
“It is quite amazing how oil prices have recovered from Monday’s lows. That is shoring up risk appetite and pushing up commodity-linked currencies,” said Niels Christensen, FX strategist at Nordea. “As long as oil remains above $43 a barrel we think commodity currencies will remain supported.”
via Reuters
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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