An overnight change of fortune has resulted in a hike in commodity currencies like Canadian and Australian dollars. The hike was caused by a sudden surge in the price of oil which in turn supported the aforementioned currencies to take a firm hold in the market. The US dollar, however, came to a pause despite major market changes in the last couple of days.
The Australian dollar edged 0.5% last Thursday, keeping up with the growth streak from the previous days. On the other hand, the Canadian dollar reached its highest value in 10 weeks and is currently worth 1.245 against the US dollar. It is worth noting that this value is also supported by the higher inflation rate of the Canadian dollar. These price hikes are the result of an overnight surge in the value of oil.
What boggles the mind of everyone is the fact that the spread of the Omicron variant does not seem to have any effect on the market prices. According to currency strategist Kim Mundy from the Commonwealth Bank of Australia, this new variant is very unlikely to cause any long-term detrimental effects on the global economy. This new variant is probably not as severe as earlier versions of the coronavirus. Moreover, the increasing vaccination rate also adds to the non-severity of this spread. These aspects have tremendously helped the market in recent times and eventually resulted in oil price hikes.
A palpable demand for oils amidst a short-term low supply has helped these commodities to rally the market. Brent Crude futures utilized this situation effectively and reached its highest position ever since October of 2014. The commodity currently stands at $89.17 after this hike. Newcastle coal futures have moreover been able to get to their highest position since last October.
The United States Benchmark Index has grown 1.902% on Wednesday this week. However, it soon came to a pause and was standing at 1.8611% as it closed. These gains come just as the feds are preparing to strengthen the policies and rates faster than ever. A poll by Reuters among analysts claimed that the Feds could raise the rates at least three times this year, but it would not be a surprise if it goes to four. Euro, on the other hand, kept a steady pace after a short stumble last Tuesday. The currency has edged to $1.347 ever since.
The market felt healthy signs in other places as well. The German bonds have shown a growth greater than 0%. The Great Britain Pound showed a 0.958% rise reaching the highest level since 2018. Sterling which fell 0.46% previously, has gained around 0.73% in the last few days. December month employment statistics from the Australian Bureau of Statistics, to be published at 00:30 GMT on Thursday, will be the immediate catalyst for the AUD/USD pair traders. To really take advantage of the Australian forex market, consider using one of the leading Australian forex brokers. Click here to find the best Australian forex broker.
Source: https://www.cryptonewsz.com/high-oil-prices-boost-commodity-currencies-dollar-rally-stalls/