The commodity currencies declined against their safe-haven rivals such as the U.S. dollar and the yen on Monday. The Australian dollar fell by 0.17% to $0.6338, pulling back from a four-week high. Meanwhile, the New Zealand dollar declined by 0.21% to $0.6072.
The record output cut agreed by OPEC, as well as other oil-producing nations, failed to offset the investors’ concerns about lowering global demand. As a result, the U.S. currency gained against the Australian and New Zealand dollars.
The initial reaction suggests that the fall in oil demand is well ahead of the output cuts that were agreed upon – noted Yukio Ishizuki, the FX strategist at Daiwa Securities in Tokyo. According to him, this encourages risk-off trading, which should support the Japanese yen, as well as being bad news for oil traders.
The U.S. dollar held steady at C$1.3956 against the Canadian dollar. It has also climbed up by 0.63% against the Norwegian crown to 10.25 and 0.51% to 23.45 Mexican pesos.
On the other hand, the greenback lowered against the safe-haven Swiss franc, steadying at the end at 0.9661. It also traded at $1.0928 per euro, near its lowest level over the previous week. However, the experts argue that further declines of the dollar may be limited.
Meanwhile, the sterling held steady at $1.2470, last trading 87.67 pence per euro. The pound recovered after Prime Minister Boris Johnson left the hospital, where he was getting treatment for the coronavirus.
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What about the Chinese Yuan and the Japanese Yen?
The traders are waiting for China to release export data for March on Tuesday to evaluate the coronavirus’ damage to the global economy. In the onshore market, the Chinese yuan traded at 7.0424 per dollar.
The Japanese yen gained more than 0.4% versus the Australian and New Zealand currencies on Monday. It also rose by 0.33% to 108.15 per dollar in Asia. Traders often sought the yen as a safe-haven during times of stress because of Japan’s current account surplus.