Dollar rallies as oil-linked currencies skid amid crude’s price drop

The U.S. dollar inched higher versus its main rivals on Friday, as U.S. traders returned from the Thanksgiving holiday, and investors closely tracked an intensifying decline in crude oil.

The global oil benchmark, Brent for January delivery LCOF9, +1.97%  was down nearly 5%. Growing output continues to weigh on the oil price, despite a recent cold snap. The price drop hurt financial assets across the board, including stocks and commodity-linked currencies.

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The Norwegian krone USDNOK, -0.4397%  led developed market losers, trading near its lowest level since May 2017, with one dollar fetching 8.5915 krone, up from 8.5349 late Thursday in New York. Canada’s dollar USDCAD, -0.2947%  also weakened versus its U.S. rival, leaving the greenback to rise to C$1.3208, from C$1.3190.

In emerging markets, oil-linked currencies, the Russian ruble USDRUB, +0.4221%  drifted sharply down, recently at 66.224 ruble per one dollar, compared with 65.603 ruble late Thursday.

As for the greenback’s trade against major rivals, the ICE U.S. Dollar Index DXY, -0.12%  was up 0.1% at 96.830, headed for a 0.4% gain this week.

Elsewhere, European markets continued worrying about Brexit developments ahead of a key summit this weekend.

The future for Gibraltar — a British-held peninsula in the south of Spain — following Brexit is the latest hurdle to emerge during the U.K.’s divorce from Brussels, with Spain demanding to get more of a say in the future of the key transport hub.

Meanwhile, embattled U.K. Prime Minister Theresa May has been trying to appeal to the British public to support the deal she agreed to with the EU on Thursday. The deal had led the pound to climb higher.

On the data front, November PMIs for the eurozone underperformed consensus estimates, with the composite index coming in at 52.4, versus 53 expected, which also weighed on the euro. A reading of at least 50 indicates improving conditions.

The weaker-than-expected data dealt a blow to any investors looking for a eurozone rebound in the fourth quarter, market participants said.

“Continued weakness will have many beginning to doubt the ECB’s ability to hike rates next year,” said Win Thin, global head of currency strategy at Brown Brothers Harriman. “Quantitative easing will undoubtedly end in December but talk of another TLTRO [targeted longer-term refinancing options] is feeding into a more dovish take on the ECB.”


Shares of Apple suppliers in Asia sink amid worries about iPhone demand

Philip W. Schiller, Senior Vice President, Worldwide Marketing of Apple, speaks about the the new Apple iPhone XR at an Apple Inc product launch event at the Steve Jobs Theater in Cupertino, California, September 12, 2018.

Shares of some major Apple suppliers fell in Asian trading Tuesday — some to multi-year lows — after the iPhone maker’s stock plunged on concerns about customer demand.

Apple dropped 5 percent overnight in New York trading after Lumentum, a manufacturer of lasers that can sense in 3-D, said it received a request from one of its largest customers to “materially reduce” shipments to them. Lumentum shares dropped nearly 33 percent. The company did not name Apple in Monday’s report, but previously listed the tech giant as its largest customer in a filing for fiscal year 2018.

Also on Monday, TF International Securities’ Ming-Chi Kuo reversed his view on iPhone XR sales by cutting his outlook for shipments by 30 million units. The reduction followed a Nikkei report earlier this month, citing supply chain sources, that Apple told Foxconn and Pegatron to stop plans for additional iPhone XR-related production lines.

The worries about slowing iPhone demand spilled over into shares of Apple suppliers in Tuesday trading in Asia, where most of the companies are based.

In Taiwan, Hon Hai Precision, better known as Foxconn, fell more than 2 percent to its lowest in nearly a month.

Pegatron briefly fell more than 5 percent to its lowest since May 2014, before recovering losses and trading higher. Largan Precision also temporarily tumbled more than 5 percent to its lowest since July 2016 before reversing and rising more than half a percent.

In Japan, Panasonic declined 2.5 percent and Alps Electric dropped nearly 5.8 percent, both to their lowest since late 2016. Nitto Denko fell more than 4 percent.

Hong Kong-traded AAC Technologies briefly fell more than 7 percent to its lowest in more than two years, before recovering much of its losses.

In Shenzhen, Luxshare fell more than 5 percent to its lowest in a month, while Suzhou Anjie Technology fell more than 1 percent.

The major Asian stock indexes pared opening losses by midday Tuesday..