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It isn’t just energy companies that are taking a hiding on the back of Wednesday’s sharp drop in crude prices. Oil currencies have had a rough day as well.
Most oil-reliant currencies like the South African rand, the Aussie dollar, the Russian rouble and the Norwegian krone had all advanced against the buck so far this year, aided partly by a stabilisation in oil prices.
But with US crude prices dropping more than 5 per cent and a near 5 per cent decline in Brent crude prices on Wednesday — triggered by a larger-than-expected build in US oil inventories, which climbed for the ninth consecutive week — these currencies are under pressure:
- The Russian rouble dropped 1.2 per cent against the greenback to 58.89 per buck
- The South African rand fell 1.1 per cent to 13.12 per US dollar
- The Norwegian krone declined 1.1 per cent against the buck to 8.55
- The Aussie dollar slid 0.8 per cent to 1.328 per US dollar
- The loonie was down 0.6 per cent to its lowest level of the year, 1.35 against the US dollar.
The slide was compounded by a 0.3 per cent rise in the dollar index, a measure of the buck against a basket of peers, that was aided by a strong ADP report on private-sector employment.