Commodity Currencies Dip on Oil Price Drop

The Norwegian Crown, as well as the Aussie, Kiwi and Canadian Dollar were all under pressure. Generally, currencies linked to the price of commodities fell on Wednesday in London, dragged down by the fall in oil prices after the deal to reduce global output was reached by the OPEC as well as the non-OPEC producers. Analysts are concerned about the impact that the weakness in oil prices will have in the short term and whether or not it could grow into a large risk-off movement. Oil prices are currently close to multi-month lows, with WTI crude at $43.30 a barrel and Brent crude at $45.76 a barrel.

As reported at 10:52 am (BST) in London, the AUD/USD was trading at $0.7567, down 0.15%. The USD/CAD was trading at C$1.3287, up 0.15%. The USD/NOK is trading at 8.55043 Krone, up 0.17%. The NZD/USD had just edged higher at $0.7244, a gain of 0.04%; earlier the pair had hit a trough of $0.72120.

Analysts point out that the rise in the NZD/USD could be short-lived, however, because investors are waiting for the latest monetary policy statement from the Reserve Bank of New Zealand. In general, expectations are for the NZ central bank to hold the benchmark lending rate at the current 1.75%. FX traders will be looking for clues as to how the RBNZ views the pressure on commodity prices, and its impact on Chinese economic growth, which New Zealand's economy is reliant upon.

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