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Dollar slips on oil decline

dollar, coinThe Australian dollar has been dented by declines in the global oil price.

At 0700 AEDT on Tuesday, the currency was trading at 72.66 US cents, down from 73.28 cents on Monday.

Brent crude prices have fallen to the lowest level in nearly seven years after OPEC’s meeting ended last week in disagreement over production cuts.

“The (West Texas Intermediate) oil price is down more than five per cent, that’s back to levels it hasn’t traded at since early 2009,” Kim Martin, senior, market strategist, Bank of New Zealand, said.

Martin said markets in general and commodity-related currencies in particular were feeling the pinch.

“The Norwegian Krone and Canadian dollar, which are oil-producing countries, have performed particularly badly,” she said.

Looking ahead, Chinese trade balance data and National Australia Bank’s monthly business survey would be key event risks for Tuesday,  Martin said.

Westpac strategist, Imre Speizer, said the commodities rout had stalled recent upward momentum in the Aussie, and the currency is vulnerable to slumping to 72.50 US cents on Tuesday.

AAP

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