Commodity currencies fight back

Published: 2 Dec at 5 AM Tags: Euro, Dollar,

The US dollar has dipped slightly after a broad commodity price rebound which has been good news for currencies including the Canadian, Australian and New Zealand dollars. A rise in the price of gold, copper and oil helped the Canadian dollar rise from a low of C$1.1459 per US dollar to C$1.1327.

Brent crude, the international benchmark for oil, pulled away from a five-year trough of $67.53 per barrel to $72.95 helping the Aussie to rise above 85 US cents after dropping to $0.8417, the lowest the currency has been in well over four years. The kiwi also recovered from $0.777 to $0.7876.

However the US dollar was able to pull back some ground after positive comments from Stanley Fischer, Vice Chairman of the Federal Reserve, about inflation and wages. Moody’s decision to cut Japan’s sovereign ratings saw the greenback drop to 118.37 yen. The dollar had previously enjoyed a seven-year high of 119.15.

Investors are now focused on Thursday’s meeting at the European Central Bank. Analysts will be waiting for signs that the bank’s head Mario Draghi intends to implement a sovereign bond-buying programme to help boost the economy of the eurozone.

Investors will also be focused on whether commodity prices will continue to recover after their recent hammering.