The Canadian dollar, Norwegian crown and currencies of other major oil exporters fell on Tuesday, hitting decade-plus lows versus the dollar as concerns about an oil supply glut and soft global demand sent crude prices to near seven-year lows. Growth-oriented currencies such as the Australian dollar also remained on the defensive after Chinese trade data for November did little to soothe concerns about China's economic slowdown.
Falling oil and weak metal prices underpinned bets central banks of export-reliant economies would embark on more stimulus to weaken their currencies in a bid help exporters. "It's a perfect storm for commodity currencies," said Mazen Issa, senior currency strategist at TD Securities in New York. Fed policy-makers meet next Tuesday and Wednesday.
The dollar, while stronger against commodity currencies, retreated against the euro and the yen. The weak outlook on oil, metal and other key exports has hurt stock prices world-wide, reducing the greenback's allure against these major currencies. The euro gained 0.4 percent at $1.0878, while the dollar fell 0.5 percent at 122.77 yen. The dollar against a group of major currencies was down 0.2 percent at 98.437.
On the flip side, the dollar touched C$1.3623, its strongest against its Canadian counterpart since mid-2004. It rose 1.5 percent versus the Norwegian crown, touching 8.8194 crowns, its highest since April 2002. The Australian dollar fell 0.8 percent to $0.7209 as this week's tumble in iron ore prices and the latest Chinese data weighed on the currency's woes.
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