Commodity-Exporter Currencies Slump as Oil Falls on Doha Failureby and
Brazilian real, Russian ruble decline as crude slides
Canada's dollar slips most in G-10 on lack of accord
The currencies of commodity-exporting nations dropped after oil-producing countries failed to reach an accord to freeze output.
The currencies of Canada, Russia and Malaysia retreated after negotiations in Doha ended without an agreement from OPEC and other oil producers to freeze supplies. Brazil’s currency slumped as the nation’s central bank stepped up efforts to weaken it to keep exports from slumping.
"The lower oil price has hurt sentiment, and that is reflected through financial markets and commodity-exporter currencies," said Georgette Boele, a currency strategist at ABN Amro Bank NV in Amsterdam. While the weakness will probably linger, supply curbs may boost commodity prices within weeks and help underpin the currencies of resource-rich countries, she said.
Those currencies have rebounded in the past three months as crude and other commodities bounced. The revival coincided with a slump in the U.S. dollar on speculation that the Federal Reserve will hold off on raising interest rates for the time being.
Canada’s dollar weakened 0.3 percent to C$1.2856 against the greenback as of 10:25 a.m. New York time. It earlier plunged as much as 1.3 percent and was the worst-performing currency among its Group-of-10 peers. Crude is the nation’s second-largest export.
Oil futures fell as much as 6.8 percent on the New York Mercantile Exchange, the biggest intraday drop since Feb. 1.
“Oil is the most dominant theme,” said Thu Lan Nguyen, a currency strategist at Commerzbank AG in Frankfurt. “It is a relatively clear pattern of commodity currencies being under pressure.”