ADVERTISEMENT

Commodity currencies climb as oil prices hit 6-month high

The Australian dollar was the biggest climber among major currencies, gaining as much as 1.2 percent against its U.S. counterpart.

Wads of euro banknotes are stacked in a pile at the Money Service Austria company's headquarters in Vienna, Austria, March 3, 2016.

Commodity-linked currencies climbed on Tuesday as oil prices reached six-month highs, while a risk-on mood across markets dampened demand for the yen and the dollar ahead of U.S. inflation data later in the day.

Already lifted by rallying oil prices, the Aussie was given a further boost by minutes from the Reserve Bank of Australia (RBA), which tempered expectations of an interest rate cut.

Oil exporter Norway's currency hit a two-week high of 9.2090 crowns per euro, and the Canadian and New Zealand dollars , also commodity-dependent, climbed.

"The Aussie ...is pulling the other commodity currencies up," said RBC Capital Markets currency strategist Adam Cole in London. "The expectation was that the minutes of the RBA meeting would have set us up for another cut in June, and that was very much not the case."

ADVERTISEMENT

The dollar index, which tracks the currency against a basket of six others, edged down 0.2 percent to 94.414, away from a three-week high of 94.845 hit on Friday.

The only major currencies to fall against the dollar were the euro and the yen, down 0.1 percent and 0.4 percent respectively as investors moved towards riskier assets across markets.

Japan will this weekend host a meeting of G7 finance leaders that could expose a rift on issues ranging from currency and fiscal policies, on which Japan is hoping for a coordinated policy response.

The major data focus on Tuesday is U.S. inflation due at 1230 GMT.

Fed funds futures rates show investors see only a 4 percent chance the U.S. Federal Reserve will raise interest rates at its June policy meeting, but many investors believe another hike will come later this year.

ADVERTISEMENT

"From the Fed's perspective, so long as core CPI continues to hover above 2 percent, ongoing signs of a recovery in headline inflation will be seen as a hawkish development," wrote strategists from ING in London in a note to clients.

"With markets barely pricing in a near-term Fed rate ...we suspect that short-term U.S. rates may nudge higher ...though uncertainty over the Fed's willingness to allow for an inflation overshoot may limit any material upside."

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Siamese twin gets married while still conjoined with her sister

Siamese twin gets married while still conjoined with her sister

LP BoT kicks out Abure despite convention victory, takes over party affairs

LP BoT kicks out Abure despite convention victory, takes over party affairs

6 Labour Party lawmakers defect to PDP in Enugu State

6 Labour Party lawmakers defect to PDP in Enugu State

Tinubu's special assistant donates food items to 1,700 residents in FCT

Tinubu's special assistant donates food items to 1,700 residents in FCT

Anambra PASAN begins strike over Soludo's failure to grant financial autonomy

Anambra PASAN begins strike over Soludo's failure to grant financial autonomy

Governor Sanwo-Olu pays ₦4.48 billion to 1,455 retirees in accrued pensions

Governor Sanwo-Olu pays ₦4.48 billion to 1,455 retirees in accrued pensions

Court discharges ex-AGF Adoke, 6 others in Malabu oil scam case

Court discharges ex-AGF Adoke, 6 others in Malabu oil scam case

Nigerians are expected to pay for TV licences — here’s what the law says

Nigerians are expected to pay for TV licences — here’s what the law says

BEDC management denies rumours of dissolution, increases revenue

BEDC management denies rumours of dissolution, increases revenue

Pulse Sports

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

Michelle Alozie: I had to do it because of African referees

Michelle Alozie: I had to do it because of African referees

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

ADVERTISEMENT
ADVERTISEMENT