(Bloomberg) — The Norwegian krone led commodity currencies higher in early Monday trading in Asia after OPEC+ announced a shock oil-production cut, while the yen weakened on the prospect of higher crude prices.
Most Read from Bloomberg
The group’s decision to reduce production by more than 1 million barrels a day, after prior assurances that it would hold supply steady, risks adding to global inflationary pressures and could spur central banks to keep policy tighter for longer. Crude fell to a 15-month low last month amid the banking-sector chaos, before recovering some ground.
The krone gained about 0.4% to around 10.43 per dollar as trading got underway. It lost roughly 6% in the first quarter, making it the weakest Group-of-10 currency this year as oil slumped. The Canadian and Australian dollars appreciated about 0.1% or more Monday, while the New Zealand currency was steady.
The OPEC+ news will reverberate through markets that are leaning toward the Federal Reserve cutting interest rates by year-end, on the expectation that banking-sector strains will weigh on economic growth. That’s despite still-elevated inflation readings.
The currency of Japan, a major importer of oil, weakened 0.3% to 133.31 per dollar Monday, after depreciating 1.3% last quarter. It fell 0.3% to 144.48 per euro.
(Updates rates, adds yen move.)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.
