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Oil Producer's Currencies Are Collapsing As Brent Breaks Below $40
With the oil price collapse accelerating (Brent just dropped below $40 for the first time since Feb 2009), the currencies of major oil-exporting nations - such as the Canadian dollar and Norwegian crown - are plunging...
Not helped by weakness in China trade data, questions over global growth and inflation expectations are growing. Oil-exporting nations (and growth-linked currencies) are getting monkey-hammered...
Just when traders thought the bottom was in...
As Reuters notes, with lower oil prices likely to add to global deflationary concern and Chinese data doing little to improve sentiment, risk appetite remained fragile.
The Canadian currency fell 0.4 percent against the U.S. dollar, to C$1.3555. That was the U.S. dollar's strongest level since mid-2004.
Similarly the Norwegian crown fell a six-week low against the euro.
"If you are looking to play weak oil prices, you would want to sell the Canadian dollar and the Norwegian crown," said Jeremy Stretch, head of currency strategy at CIBC World Markets. "With oil prices falling and some even talking about oil falling to $30 a barrel, revenues for these countries will take a beating and hence their currencies will remain under pressure."
The Australian dollar fell 0.6 percent to $0.7220 AUD=D4 as this week's tumble in iron ore and the latest Chinese data weighted on the currency's woes.
Citi recommended that investors sell the Aussie through options. "The weakness in the Chinese economy will spill over to Australia through commodities demand as well as reduced demand for the Australian dollar via reserves and other channels. This should leave it vulnerable to an eventual leg higher in the dollar," they said.
Charts: Bloomberg
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all hail the USD
Oil is at it's lowest point in ten years. Think we're going to see $0.50/gal gas? Not a chance.
The dealer's cost of gasoline could go to $0.00 and we'd still be paying close to a buck per gallon in state and federal taxes -- if not more.
From: https://www.eia.gov/tools/faqs/faq.cfm?id=10&t=10
Average gasoline tax is about $0.45. I guess that is "close" to a buck, but it is not more.
Too simplistic. In California it's broken out like this:
That is more than a buck in some cases. As usual, the biggest profiteer on gasoline is Big Government -- not Big Oil.
http://watchdog.org/232083/california-gas-taxes/
The dollar being (over)valued this way was predicted as part of the final run to oblivion.
A lot of naked emperors these days.
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All we need is some IMF bailouts, and these nasty recessions become outright depressions...with compressed asset values and political guarantess for the oligarchs.
Okay. Keep the oil, do and make real shit with it or ask for something a bit more real in exchange. Why do people think this will be good for the petrodollar?
Remember, the velocity of a dead currency is in fact zero.
This is horrible.....where will it end? I don't remember any Saudis coming over and helping me pay my gas bill.
Nope but they sent a bunch of folks over here to shoot at us. That gota count fo' som thin.
Im hoping those Dbags get what they wish for. Here's to $10 oil. Saudi will be a F%^*ing mess with $10 oil. All those pampered princes will get strung up on a minaret in a Saudi winter.
No matter how low the price goes they'll find money for mosques and Islamic terrorists in the West.
The ruble is at 70 now and it is one of the only decent currencies on earth.
Well, I do remember buying the ruble when it was somewhere around 8,500 per dollar...
Yes, public debt is Russia is low, that's what bankruptcy/default are all about. 'merica's turn.
hedge accordingly.
Decent for what, shorting? It'll be a buy someday, just not for a while.
I wouldn't wait to long a year max two.
Death to America!
Buy low! Sell high!
I thought it was BTFATH.
O yah, I got ti wrong. Thanks OP!
Sell Low. Buy lower!
This is obviously by design to crush Russia. The elites are manufacturing an economic war!! Now I see clearly why Syria is so important to Mr. Putin.. Saudi Arabia won't stop production and ISIS OIL is in the black market?!?= Low Prices. UK, USSA and Israel axis of EVIL!
Tales of a "Currency Assassin" . If your swimming with others in the ocean and encounter hungry sharks, a good survival tactic is to stab the guy next to you and swim full throttle away from the scene.
But try not to splash too much.
Trade War --->Currency War ---> Shooting War
Crude oil futures are traded through the super-corrupt CME Group.
Central banks get discounts for trading EVERYTHING through CME Group and Comex
http://www.gata.org/node/14385
$20 bucks a barrel and/or bust.
For long term investors, AUD is a great opportunity. I expect huge up trend sometimes soon, probably at the beginning of next year. Just look at weekly and monthly, their "advice" only confirm that.