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Aussie eases off 10-month high as commodities fall
The end of the oil workers’ strike in Kuwait weighed on oil prices on Wednesday. This impacted commodity-linked currencies like the Australian and Canadian dollars, which fell from recent highs today as a rally in crude oil prices stalled on the news of the end of the strike in OPEC’s fourth largest oil producing nation.
AUDUSD eased 0.3 percent at $0.7791 after hitting as high as $0.7827 on Tuesday, the highest since June. The aussie benefited in recent days from a sharp bounce in crude oil and equities, with U.S. stocks coming within reach of a record high. The US Federal Reserve’s caution over raising interest rates, coupled with ultra-loose monetary policies in Japan and Europe, has boosted the appeal of the higher-yielding Aussie this year.
The Canadian dollar reached its strongest level since July versus the greenback at C$1.2630 per USD on Tuesday, a high last seen in July, before slipping back to C$1.2698.
Crude futures fell on Wednesday, snapping a sharp two-day rally, after Kuwaiti oil workers ended a three-day strike that had cut production from the Middle Eastern country.
EURUSD traded at $1.1365, continuing to recover from a low of $1.1234 set last week. Traders said much now depends on the outcome of the European Central Bank (ECB) policy meeting on Thursday.
In March, ECB chief Mario Draghi unleashed a bold easing package but the euro rallied after he suggested there would be no further cuts.
Disappointing US housing data on Tuesday was a drag on the greenback against the euro and commodity currencies.
USDJPY fell after the data but today the pair briefly climbed back above 109.00 yen.
The New Zealand dollar rose above 70 U.S. cents for the first time in 10 months on Tuesday and consolidated gains on Wednesday. Helping support the kiwi were international milk prices which rose for a second time this month. The rise in dairy auction prices beat expectations, led by a jump in whole milk.
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