Australian dollar, Norwegian krone sink as oil tanks

The Australian dollar and Norwegian krone are vying for the ignominious title of worst-performing major currency today as commodity prices tumble.

Following a stumble in oil prices in Asia on Friday that took Brent crude and West Texas Intermediate to their lowest since November, the krone (pictured above) suffered a sharp fall and surpassed the Aussie dollar as the worst among major currencies.

The krone was down 0.4 per cent at 8.7105 per dollar, but had been off by as much as 0.5 per cent when it raced past a suite of other commodity-linked currencies from Australia, Canada, Mexico and South Africa.

Norway’s economy is heavily reliant on oil. The krone is sitting at its weakest level against the dollar since late December, and the weakest against its main counterpart the euro since June last year.

But another slide has seen the Aussie dollar reclaim its spot as the worst major currency today. Down 0.6 per cent at a four-month low of $0.7368, the Australian currency ad been under pressure all morning in Asia, with prices for commodities such as iron ore and coal tumbling again on Chinese exchanges.

The Reserve Bank of Australia left its economic forecasts unchanged in its Statement on Monetary Policy today, with little effect on the currency markets. Many economists note the RBA will still be keeping a close watch on the labour market, which has been mixed, and the impact of high household debt on consumption.

Also weak today are the Mexican peso, down 0.4 per cent, and the Canadian dollar, down 0.3 per cent. The South African rand is off 0.3 per cent.

Another so-called commodity currency, the New Zealand dollar, was also dragged along for the slide. Data showing inflation expectations for the June quarter hitting their highest since 2014 had the Kiwi up as much as 0.3 per cent, but it is now trading 0.1 per cent lower against the greenback in the Asian afternoon session.

Owing to its status as a major commodity exporter, Malaysia’s ringgit is down 0.2 per cent against the dollar.