Oil prices hit their lowest since 2003 on Monday, as the market braced for a jump in Iranian exports after the lifting of sanctions against the country over the weekend. The U.N. nuclear watchdog on Saturday said Tehran had met its commitments to curtail its nuclear program, and the United States immediately revoked sanctions that had slashed the OPEC member's oil exports by around 2 million barrels per day (bpd) since their pre-sanctions 2011 peak to little more than 1 million bpd. While this could trigger sudden price jumps once traders close positions to cash in from further drops, it also indicates that many market participants think there is still more downside to prices. Iran's potential new exports come at a time when global markets are already reeling from chronic oversupply as producers pump a million barrels or more of crude every day in excess of demand, pulling down crude prices by over 75 percent since mid-2014 and by over a quarter since the start of 2016.
The safe-haven yen got off to a flying start on Monday, while the Australian dollar, usually sold off in times of market stress, stayed under pressure as Asian equities geared up for a torrid session following a big selloff on Wall Street. Investors also took aim at the Canadian dollar, driving it to a near 13-year low around C$1.4650 CAD=D4 on growing expectations the Bank of Canada will cut interest rates as early as this week.
The euro dipped to a one-week low of 127.48 yen EURJPY=R, while the Aussie dollar was pinned near Friday's three-year trough of 79.52 yen AUDJPY=R. Against the U.S. dollar, sterling languished at a 5.5-year low below $1.4300 GBP=D4, while the Aussie was a whisker away from a seven-year low of $0.6827 AUD=D4 set on Friday. The outlook for commodity currencies, particularly the loonie, remained bleak given expectations for further weakness in oil prices.