To record oil output cuts, investors react. Because of the coronavirus, oil demand is collapsing. This pandemic is encouraging risk-off trades.
There is a record output cut agreed by OPEC. Nevertheless, other nations of oil-producing failed to offset broader concerns about the slumping global demand. On Monday, commodity currencies slipped against the safe-haven rivals such as the yen and dollar.
Against its New Zealand and Australian counterparts, the United States dollar drifted higher. Thus, in a sign, the investor remains concerned about the outlook of consumption for commodities. Those currencies are a barometer for market risk.
Over the spread of coronavirus, financial markets remain on edge. There are severe restrictions on personal movement throughout the world. Thus, the global economy is into a deep recession.
Yukio Ishizuki is a forex strategist in Tokyo at Daiwa Securities. He said that the initial reaction is suggesting that the decline in oil demand is well ahead of the output cuts that were initially thought.
Moreover, Ishizuki adds that it is harmful to oil producers. That is also encouraging risk-off trading, which must support the yen.
Against the Mexican pesos, the dollar roses 0.51% to 23.45. Against the Norwegian crown, the United States dollar rose 0.63% to 10.25.
The United States currency held steady at C$1.3965 against the Canadian dollar.
For the Easter Monday holiday, the financial markets in Britain, New Zealand, Hong Kong, and Australia are not working. Thus, trading could be somewhat subdued.
On Sunday, major oil producers agreed to output cuts. It was to prop up oil markets as the coronavirus pandemic severely curtailed global demand.
On worries about the coronavirus, oil prices had gone into freefall. The price war between Russia and Saudi Arabia is working as straining the budget hammers and oil producers in the United States shale industry.
Currencies from Canada, Mexico, Norway, got a boost on Friday.
All in all, this is the current news of the market.
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