* Commodity currencies benefit from OPEC output cut deal
* But questions remain on how to cut production
* Euro little changed, eyes on German inflation
By Hideyuki Sano
TOKYO, Sept 29 Commodity-linked currencies held
firm on Thursday after OPEC agreed to cut oil output in the
first such deal since 2008, boosting oil prices sharply.
The Organization of the Petroleum Exporting Countries would
reduce output to a range of 32.5-33.0 million barrels per day, a
reduction of 0.7-2.2 percent from OPEC estimates of its current
output at 33.24 million bpd.
That lifted oil prices, with international benchmark Brent
futures posting their biggest gains in 2 1/2 months to
hit a three-week high of $48.96 per barrel.
The Canadian economy, which depends heavily on oil exports,
saw its currency pull ahead. The Canadian dollar
climbed to C$1.3068 against the U.S. unit, after having risen
0.9 percent, its biggest daily gain in a month, on Wednesday.
The Norwegian crown was a clear winner, hitting a near
five-month high of 8.0222 to the dollar and 14-month
high of 9.0085 per euro.
The Australian dollar also hit a three-week high of
$0.7696, as the country exports various natural resources even
though it is a net importer of oil.
Still, some analysts cautioned that the oil-cut deal is
leaving crucial details on how much each country will produce to
be decided at the next formal OPEC meeting in November, when an
invitation to join cuts could also be extended to non-OPEC
countries such as Russia.
"It could be that everyone is thinking that they don't cut
output themselves," said Daisuke Uno, chief strategist at
Sumitomo Mitsui Bank.
"I think the markets are still not fully convinced," he
The dollar rose a tad against the yen to 100.92 yen,
edging up from one-month low of 100.085 touched on Tuesday,
supported by oil-led recovery in share prices.
The euro was little changed at $1.1222, recovering
from Wednesday's low of $1.1182 in part helped by rebound in
shares of Deutsche Bank.
The currency is trading near the middle of its narrow
triangle holding pattern since August.
In the short-term, German inflation data could help the
currency if it shows a rise in consumer prices as expected, said
Masafumi Yamamoto, chief FX strategist at Mizuho Securities.
German annual inflation is expected to rise to 0.5 percent
in September from 0.3 percent in August.
"German inflation has been recovering after hitting a bottom
of minus 0.3 percent in April. If we see a number in line with
market expectations, that could dampen expectations of further
momentary easing by the European Central Bank in December," he
(Editing by Shri Navaratnam)