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Commodity currencies hit by falling oil prices, bitcoin close to 10-month low

By on May 10, 2022 0

A man walks past various currency signs, including the dollar (top R), Australian dollar (top L), pound sterling (center L) and euro (bottom L), outside a brokerage house in Tokyo October 28, 2014. REUTERS / Yuya Shino

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HONG KONG, May 10 (Reuters) – Falling commodity prices drove the Australian and Canadian currencies lower on Tuesday, although the dollar remained stable against most other major currencies while bitcoin continued to rise. fall.

The Australian dollar fell as low as $0.6920, its weakest since July 2020, after falling 1.7% overnight, which CBA analysts attributed to falling global asset prices .

“The backdrop of heightened financial market volatility suggests that the AUD has the potential to fall further against the USD and other major crosses in the near term,” they added.

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Global stock markets were hit hard on Monday, with the Nasdaq tumbling more than 4% in a selloff led by mega-cap growth stocks. Meanwhile, oil prices fell about 6%, extending declines on Tuesday as coronavirus lockdowns in China, the main oil importer, stoked demand concerns.

Lower oil prices also hurt the Canadian dollar, which touched CA$1.3037 per dollar, its weakest since November 2020 and the Norwegian krone touched 9.7184 per dollar, its lowest since June 2020.

The dollar index was flat at 103.7 on Tuesday morning, after hitting 104.19 overnight, a new 20-year high. It then lost ground after Atlanta Fed President Raphael Bostic spoke of 75 basis points at the Fed’s next meeting. Read more

Over the past few weeks, markets have priced in a reasonable chance of such a massive upside.

Yields on US Treasuries rose on expectations that the Fed would aggressively cut inflation, sending the dollar higher for five straight weeks.

The benchmark 10-year yield fell back below 3% on Tuesday to 2.9846%.

Bostic’s muted remarks helped the Japanese yen recover a bit from a new 20-year low of 131.34 yen to the dollar hit overnight. The Japanese currency, which is sensitive to movements in US yields, strengthened further on Tuesday to 130.1.

The euro beat was a fraction higher at $1.0561 and the pound was little changed at $1.2329.

There was also excitement in the crypto markets, where bitcoin fell below $30,000 for the first time since July 2021.

The world’s largest cryptocurrency trades largely online with other so-called risky assets, such as tech stocks. It was a bit firmer around $30,600.

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Reporting by Alun John; Editing by Sam Holmes

Our standards: The Thomson Reuters Trust Principles.