Oil-linked currencies edged up slightly on Wednesday after they collapsed on Tuesday’s session. The Canadian dollar rose by 0.5% against the dollar yesterday.
The Australian dollar gained more, rising by 0.8% after a record surge in retail sales last month. The recovery in U.S. crude CLc1 moved it out of the negative territory, but it’s trading at around $11 a barrel, still some 80% under January’s peak.
Meanwhile, the Norwegian crown changed insignificantly, holding close to its lowest in almost a month against the greenback. The Canadian dollar’s losses are limited, but that fact is unlikely to be seen as an entirely positive development domestically – stated Commerzbank’s Nguyen.
Oil prices fell in overnight trading on Wednesday after collapsing to a four year low. The demand for everything, from gasoline to jet fuel, lowered due to the coronavirus outbreak and lockdown measures enforced to contain it, causing the price’s downfall. Brent plummeted to its lowest level since 1999.
According to the Commerzbank senior FX analyst, Thu Lan Nguyen, the current distortions on the oil market are more likely to be the trigger for the market to reveal its worst fears regarding the economic extent of the pandemic crisis.
What about the Japanese Yen and the U.S. dollar?
The safe-haven currencies were in demand due to the uncertainty in the markets. The Japanese yen climbed up by 0.1% against the dollar, maintaining its gains from the previous week.
The investors are waiting for an EU meeting on Thursday to discuss financial aid in the eurozone. Meanwhile, the euro remained range-bound, trading at $1.08710 at the last measure.
On the other hand, the U.S. dollar lowered slightly on Wednesday after its rally on Tuesday. The dollar fell by 0.2% against a basket of currencies. But it was still up roughly by 0.4% this week.