We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • The US Dollar remains in consolidation mode against the Philippine Peso and Indian Rupee. Will the Singapore Dollar weaken as $USDSGD rising support holds ahead? Find out from @ddubrovskyFX here: https://t.co/HZ8Loqj3Ey https://t.co/6PCFkdj3ka
  • Follow @DailyFXedu for your regular #webinar updates with @DailyFX analysts and catch up on the webinars you missed. https://t.co/Da10QUg9r1
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
Drop In Crude Prices To Keep Oil Producers' Currencies Weak

Drop In Crude Prices To Keep Oil Producers' Currencies Weak

2017-03-09 10:33:00
Martin Essex, MSTA, Analyst and Editor
Share:

Talking Points

- The price of Brent crude oil has steadied in Europe Thursday but its sharp fall Wednesday has taken it below key support levels.

- That means continuing downward pressure on the currencies of oil-exporting countries like Norway, Russia and Canada.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

Crude oil prices have steadied in Europe early Thursday but their dramatic drop Wednesday has taken them below key support levels, meaning downward pressure on the Norwegian Krone, Russian Ruble and Canadian Dollar could persist for some time to come.

Norway, Russia and Canada are all major oil producers so their currencies tend to move with oil prices, and the latest drop in crude could well hit them hard. As the daily chart below for Brent crude, the global benchmark, illustrates, it has now fallen below strong support from a rising trendline in place since early December last year.

Chart: Brent Crude Oil, Daily Timeframe (October 2016 to March 2017)

Drop In Crude Prices To Keep Oil Producers' Currencies Weak

While there has been no follow-through so far Thursday, there has also been little sign yet of a significant recovery from the drop prompted by a report from the American Petroleum Institute (API) that US crude inventories have surged to a record high, raising concerns that a global glut could persist even as the Organization of the Petroleum Exporting Countries (OPEC) tries to prop up prices with output cuts.

Chart: Brent Crude Oil, 5’ Timeframe (March 8/9)

Drop In Crude Prices To Keep Oil Producers' Currencies Weak

This plunge comes at a time when the NOK, RUB and CAD have all been weakening against the US Dollar as the markets prepare for a USD-positive series of interest rate increases by the Federal Reserve. Here, for example, is the Dollar strengthening against the Krone:

Chart: USDNOK Daily Timeframe (May 2016 – March 2017)

Drop In Crude Prices To Keep Oil Producers' Currencies Weak

That trend looks set to persist, barring an unexpected recovery in oil prices. Meanwhile, the rise in the price of crude has also hit the shares of BP and Royal Dutch Shell in London Thursday, and they too look set to fall further thanks to crude’s weakness.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Don't trade FX but want to learn more? Read the DailyFX Trading Guides.

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.