US Dollar Weaker Against Commodity Currencies After Oil Surge

The U.S. dollar slipped on Monday, losing ground against so-called commodity currencies as oil prices leapt on the prospects for an OPEC-led deal for continued production limits.

The greenback also lost ground against other major rivals, including the euro, extending the weakness the dollar saw on Friday, when downbeat economic data eroded much of last week’s gain.

The ICE U.S. Dollar Index DXY, -0.35% a measure of the buck against six rival currencies, fell 0.4% to 98.875. The WSJ Dollar Index BUXX, -0.26% which gauges the greenback against a wider basket of rivals, was lower by 0.3% at 89.91.

Helping to pressure the ICE dollar gauge lower was a rise in the Canadian dollar, with the oil-rich region getting a boost from higher crude prices, pushing the buck down. The dollar USDCAD, -0.5616%  fell 0.7% to 1.3610 Canadian dollars, down from 1.3712 late Friday, as Brent crude oil—the international benchmark—and U.S. crude futures LCON7, +2.71% CLM7, +2.99%  jumped 3%. Brent was fetching more than $52 a barrel.

Oil futures climbed after energy ministers from Saudi Arabia and Russia said they endorse a nine-month extension to production cuts led by members of the Organization of the Petroleum Exporting Countries.

The dollar also suffered against the other oil-linked regions, including the Australian dollar USDAUD, -0.6056% the Norwegian krone USDNOK, -0.5164%  and the Brazilian real USDBRL, -0.8007% Against the Aussie, the greenback slid roughly 0.7% to 1.3443 from 1.3539 late Friday.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza