Commodity Currencies Advance as OPEC News Bolsters Raw Materials
(Bloomberg) -- Commodity currencies including the Canadian and Australian dollars strengthened after Russia and Saudi Arabia said they favored extending a deal to reduce oil output.
The Aussie rose for a fourth day after briefly paring gains following weaker-than-expected economic data from China, its largest trading partner. A Bloomberg gauge of commodities climbed to the highest in almost two weeks. Russia and Saudi Arabia support extending the OPEC deal for another nine months, Saudi Arabia Energy Ministry Khalid Al-Falih said in Beijing alongside Russian counterpart Alexander Novak.
“A nine-month extension would illustrate the resolve of the key players to help re-balance the oil market,” said Peter Dragicevich, a foreign-exchange strategist at Nomura Singapore Ltd. “This should be supportive for oil prices and in turn the oil-sensitive currencies in the Group of 10 such as the Canadian dollar and Norwegian krone.”
The U.S. dollar held losses from Friday, when it fell after softer-than-expected core inflation data. The yen declined toward the top of an ichimoku cloud, suggesting its tenure above that level may be about end.
- USD/CAD falls 0.3% to 1.3676, AUD/USD rises 0.2% to 0.7399, NZD/USD gains 0.2% to 0.6877
- Aussie earlier trimmed gains after Chinese industrial production and retail data both missed estimates
- “Today’s soft Chinese data feeds into our view that China growth momentum peaked in 1Q,” Dragicevich said. “This should be a headwind for the AUD”
- Norway’s krone rises 0.1% to 9.3515 per euro
- USD/JPY little changed at 113.40 versus 113.12/46 range
- Hit a one-week low in initial response to North Korean missile test on the weekend
- Sales desk said reaction was somewhat muted as still confirmed whether or not missile was ballistic type, a trader said. Larger momentum selling seen under 112.80