Market sentiment turned negative again in US trading on Wednesday after oil reversed its daily gains to head back towards 12-year lows. WTI crude futures hit $30.10, having earlier traded above $31, after US gasoline inventories came in above estimates. Prices had stabilized around $30.94 a barrel today. Brent crude was hit harder though as sanctions on Iran could be lifted as early as Friday. Brent futures hit a 2004-low of $29.73 earlier today but were up at $30.48 in late Asian trading.
The Canadian dollar hit a fresh 13-year low on the tumbling oil prices as Canada is a major exporter of the commodity. The US dollar climbed to an intra-day high of 1.4382 against the loonie during today’s Asian session.
The Australian dollar also fell as other commodities followed oil lower. The aussie dropped to a low of 0.6918 against the greenback but later found support from better-than-expected unemployment data. The unemployment rate in Australia was unchanged at 5.8% in December but estimates were for an increase to 5.9%. The aussie bounced above earlier lows to climb to 0.6960 in late Asian trading.
The Chinese yuan came under pressure despite a firmer midpoint, which was set at 6.5616 yuan per dollar on Thursday. Onshore yuan fell to 6.5867, ignoring a rebound in Chinese stocks, which reversed earlier losses to end the day 2% higher.
In Japan, machinery orders in November slumped by 14.4% month-on-month, reversing the healthy gains of the prior months. The figure was far below forecasts of a 7.9% drop.
The weak data gave some support to the dollar as it attempted to claw back its losses against the yen, following a sharp drop in US shares on Wednesday. The greenback rose to 118.12 yen in late Asian trading, up from an earlier low of 117.28 yen.
The euro hit a high of 1.0896 dollars but fell back to 1.0854 as the dollar recovered. The pound also gave up earlier gains to trade around 1.44 dollars in late Asian session.
Sterling could come under pressure later today as the Bank of England holds its first monetary policy meeting of the year and its first since the Fed raised rates in December. The Bank of England is expected to publish its decision and minutes at 12:00 GMT.
Also coming up later today are the weekly initial jobless claims in the US, while a speech by the Fed’s Bullard may also attract some attention.
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