Tanking Oil Price Moves Various Currencies; CAD and AUD Affected

The recent big drop in oil prices triggered various reactions in the Forex market. Oil prices reached extreme lows with oil storage capacity decreasing. This had a direct affect on the Canadian Dollar. At the same time, the Australian Dollar also made a move in response to the situation.

The Affect on the Canadian Dollar

The CAD always has a direct relationship to oil prices. When the oil prices increases, US dollars that Canada will earn per barrel also increases. Because of that, the amount of US dollars that goes into Canada increases as well bolstering the value of the CAD.

This event caused the USDCAD to make some gains while looking for further gains being on a bullish trend. It must also be taken into consideration that the big drop will need to balance in the next weeks. This will spike some volatility in the USDCAD, possibly making sharper movements. But as of now, the USDCAD bulls are in control.

Australian Energy Minister Gives Response to Oil Drop

In his latest statement, the Australian Energy Minister Angus Taylor plans to create a strategic fuel reserve. Taylor pushed for an initial budget of 94 million AUD for creating the fuel reserve. This also includes the act of exploring possible ways to build a local oil storage.

This goes hand in hand with the low prices of oil, creating a great opportunity for Australia to push for the project. Also, Taylor mentioned that the fuel storage will initially be in the US wherein they have already signed an agreement for usage of the US’ oil reserves.

Due to the news, AUD was able to shoot up to a level above 0.6350. However, it quickly shot back down and stayed  below the 0.6300 level. It is yet to see the result of the recovery amid the upbeat news and the efforts of the country.

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