The U.S. dollar rose sharply against the Canadian loonie Tuesday hitting 1.3600 and establishing a new 11-year high. Pressure on the oil-linked Canadian dollar kept it at its low for the second day running as oil prices hovered around $37 a barrel, a 6-year low.
The U.S. dollar was mixed on Tuesday, falling against the euro, yen, and Swiss franc but rising sharply against commodity currencies like the Australian and Canadian dollars.
Crude prices saw a moderate rebound by the close on Tuesday as U.S. crude stocks dropped slightly as reports out of Asia and Japan showed stronger than expected machinery orders while China announced an easing of import taxes.
OPEC Obstinate
Leaders at OPEC last week failed to produce any agreement on an oil production ceiling, continuing the oil glut that is already in place. The indecision among major oil-producing countries helped to push WTI below its August lows this week to approach price depths not seen since 2009.
Internationally traded Brent futures were up 64 cents at $40.90 a barrel and U.S. West Texas Intermediate (WTI) crude futures were at $38.30 per barrel at 0429 GMT, up 79 cents as a result of a surprise 1.9-million-barrel fall in U.S. crude inventories to 488 million barrels last week. The American Petroleum Institute had expectations for an increase of 252,000 barrels.
According to some analysts, existing bearish factors still exist that continue to pull down global commodity prices. These analysts point to the strong dollar, weakening demand, soaring supplies and the unwinding of a quantitative easing (QE) premium. An expected rate hike by the U.S. Federal Reserve is another factor keeping commodities down.