Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Commodity Currencies Lagging Behind Oil

Published 03/11/2017, 11:56
USD/CAD
-
EUR/NOK
-
LCO
-
CL
-

Oil price are looking to break resistance at $55.03 making 2017 new highs. The decline oil stocks and solid growth in demand has overcome weather and geopolitical issues. Brent is now trading above $60brl and futures backwardation has invited deeper buying in the long end of the curve. OPEC has sighted their success in supply restrain pointing to falling inventories. It seems that WTI is likely to maintain at $55.

However, commodity-linked currencies have not followed oil prices higher. CAD and NOK have diverged significantly from oil prices in recent weeks. It is not uncommon for decoupling but the divergence rarely lasts for an extended period. The rationale is the convergence of higher oil at the same time US rates have risen, which reduced the sensitivity to external influence. With US yields stabilising we would watch for CAD and NOK to catch up to higher oil.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.