Loonie leads commodity currencies higher, dollar subdued

Thu Feb 18, 2016 12:42am EST
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By Ian Chua

SYDNEY (Reuters) - The Canadian dollar held at two-week highs on Thursday, having benefited hugely from a jump in oil prices, while an absence of fresh cues in minutes of the Federal Reserve's January meeting saw the greenback shuffle sideways.

Investors warmed to the Canadian currency after oil prices surged after Iran voiced support for a Russia-Saudi-led move to freeze production.

Although Iran gave no commitment it would curb its own output to deal with a market glut, signs of cooperation between rival producers helped to boost battered oil prices, with Brent crude futures rising to around $35 per barrel from this week's low below $32.

That helped to boost the loonie to C$1.3655 per the U.S. dollar CAD=D4, a high last seen on Feb. 4. It last stood at C$1.3657.

Some other commodity currencies took heart from the loonie's performance.

The New Zealand dollar popped back above 66 cents NZD=D4, pulling well away from a two-week trough of $0.6545 touched on Tuesday. The Malaysian dollar also rose 1.4 percent MYR=.

The Australian dollar, however, fell 0.4 percent to $0.7158 AUD=D4 after the local employment data showed an unexpected fall in payrolls and rise in the jobless rate.

The rebound in oil prices coupled with strong U.S. industrial production data helped markets recover from recent jitters. European and U.S. stocks ended higher, while most emerging market currencies also firmed.   Continued...

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch