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Commodity currencies hit by tumbling oil prices, bitcoin near 10-month low -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – A man passes various currency signs including the Australian dollar (top R), the dollar ($top L), and the pound sterling(centre L), in front of a Tokyo brokerage on October 28 2014. REUTERS/Yuya Shino

By Alun John

HONG KONG, (Reuters) – Falling commodity prices dragged Australian and Canadian currencies lower Tuesday. However, the dollar held steady against all majors as bitcoin tumbled.

Dollar fell as low $0.6920 overnight. It was its weakest point since July 2020.

The analysts said, “The background of heightened financial markets volatility means that AUD may fall further against USD and other major crosses within the near term.”

The global share market markets suffered a severe blow Monday, with the Nasdaq falling more than 4 percent in an effected sell-off triggered by large-cap growth stocks. Oil prices dropped by around 6% on Monday, with further declines due to coronavirus lockdowns in China (the top oil importer) and worries about the demand.

Canadian Dollar fell due to lower oil prices. It was C$1.3037/dollar, the weakest currency since November 2020. Norwegian Crown reached 9.7184/dollar, the lowest rate since June 2020.

After rising as high as 103.7 overnight, the price was still steady at 103.7 Tuesday morning. This is a new 20-year record. The Fed’s President Raphael Bostic of Atlanta slowed down talks about a 75-basis point at their next meeting.

Markets have been pricing in the possibility of such an enormous hike for weeks.

U.S. Treasury yields rose on the expectation of a Fed that will reduce inflation aggressively. The dollar has risen for five weeks straight.

On Tuesday, the benchmark yield of a 10-year bond fell to 2.79466% from 3%.

Bostic’s calm remarks helped to recover the Japanese yen from overnight’s 20-year low at 131.34yen/dollar. On Tuesday, the Japanese currency strengthened slightly to 130.1, as it is very sensitive to U.S yield movements.

Sterling was unchanged at $1.2329. The euro, which was heavily beaten, was only a fraction lower at $1.0561.

The excitement was evident in the crypto markets as bitcoin dropped below $30,000 for only the second time since July 2021.

World’s biggest cryptocurrency trades in line with so-called risk assets like tech stocks. The last time it was a bit firmer, around $30,000.

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