By: DailyForex.com
Commodity-linked currencies, especially those linked to the price of oil, recovered after an earlier fall in the session. Despite that recovery, analysts predict that they could be battered in the coming days. The latest fall was the result of a failure of OPEC’s oil producers to reach an agreement to freeze oil production. That uncertainty not only had pushed the Oil-linked pairs like the Aussie, Kiwi and Canadian Dollars lower, but sent investors fleeing to the safe haven of the Japanese Yen. The Yen, in fact, touched on a 3-year peak versus the Euro and a 1½ year peak versus the greenback.
As reported at 10:50 am (BST) in London, the AUD/USD was trading at $0.7707, a gain of 0.55% and just off the session high $0.7710. Meanwhile the NZD/USD was up 0.21% to trade at $0.6935. The USD/CAD was lower at C$1.2283, down 0.42%. The USD/JPY pair was trading up at 108.3510 Yen, while the EUR/JPY was trading higher at 122.5060 Yen.
Central Banks in Focus Ahead
Analysts feel that the inability to reach an agreement on Oil prices could compel even more central bankers to consider taking a dovish tack, as lower oil prices tends to have a deflationary effect. Ahead this week, the European Central Bank will be among those banks which have a policy decision to make. Mario Draghi, the president of the ECB, has already promised more intense pressure to rebuild the Eurozone economy and this oil news could further intensify his rhetoric. The governors of the Bank of England, Bank of Canada and the Reserve Bank of Australia are all due to speak tomorrow and will likely offer their own perspective on the impact of falling oil prices on their respective economies and, consequently, their currencies.