By James Ramage
The currencies of oil-producing countries such as Canada and
Norway continued to weaken against the dollar for a second straight
session Friday, as oil prices tumbled in the wake of OPEC's
decision to leave its oil production target unchanged.
The U.S. dollar rose 0.9% versus the Canadian dollar, to a
three-week high of C$1.1435. The dollar rocketed 1.5% versus the
Norwegian krone, to 7.0336 krone, the highest level since March
2009.
Fallout from the decision of the Organization of the Petroleum
Exporting Countries to maintain its oil output target of 30 million
barrels a day continued to weigh on oil prices. Brent crude, the
global benchmark, slipped $2.56, or 3.5%, at $70.02 a barrel on ICE
Futures Europe, more than a four-year low. U.S. oil futures fell
$7.54, or 10.2%, from Wednesday's close, at $66.15 a barrel on the
New York Mercantile Exchange. It was the lowest settlement since
September 2009.
Falling oil prices continued to pressure energy stocks, as well
as the Canadian dollar, the Norwegian krone and the Russian ruble,
which tumbled to its weakest level against the dollar during the
European session before rebounding.
"The oil-related currencies catch everyone's eyes, given the
OPEC decision [Thursday]," said Charles St-Arnaud, economist and
currencies strategist at Nomura Securities. "A lot of negativity is
being priced into those currencies."
In Canada, the OPEC decision also trumped positive numbers for
third-quarter growth, which came in better-than-expected on Friday
and signaled a broadening of the country's export base.
The price move, on a day marked by lighter holiday trade in the
Americas session, remained consistent with investor behavior over
the past several months. The greenback has gained against
developed-market currencies since the summer, driven by a
strengthening economy and the promise of higher interest rates in
the U.S., which is attracting yield-hungry investors.
The Federal Reserve, which ended its large-scale asset purchase
program last month, is considering when to raise interest rates, as
central banks in Japan and the eurozone are easing policy to
stimulate growth and ward off deflation. Higher U.S. rates make the
dollar more attractive, as they boost returns on assets denominated
in the currency.
The dollar on Friday rose 0.8% versus the yen, to 118.67 yen,
closing in on its strongest level against the Japanese currency
since August 2007. The euro slid 0.2% to $1.2446, inching down
toward its lowest level since August 2012.
The market will shift its attention next week to a policy
meeting of the European Central Bank on Thursday, followed by the
U.S. jobs report for November one day later.
--Write to James Ramage at james.ramage@wsj.com