Forex Analysis: Three Currencies That Declined Against the USD in 2017

The U.S. Dollar had a strong year in 2017. The U.S.'s improving economy and steady job growth, as well as the December interest rate hike by the Federal Reserve, helped the greenback gain in value.

The same wasn't true for the world's other major dollars: The Canadian, Australian, and New Zealand dollars. Thanks to sagging commodity prices, as well as the Chinese downturn, these currencies declined in value compared to the USD. In Canada, for instance, the Canadian central bank cut interest rates twice in 2017 in an attempt to boost crude exports.

Yet, the effects of Canada's strategies have yet to be seen, as the CAD hasn't yet started to rally. In fact, the country's currency dipped to 12-year lows compared to the USD, and some experts have speculated that the Loonie might continue its downward trend before reversing course.

Here's a quick look at why the AUS, NZD and CAD all underperformed in 2017:

Loonie Reaches Decade-Plus Low: It was a rough year for the Canadian dollar. In September, the Loonie declined to its lowest valuation in 11 years compared to the U.S. Dollar, before declining to 12-year lows by the end of the year. Weak oil prices were a major driver of the year-long decline of about 20 percent compared to the greenback. As energy prices continue to hover around rock-bottom prices, the Canadian dollar won't likely to start its rebound. Plus, even as oil prices start to tick up, which many are speculating with come in Q2 of 2016, it will be a slow uptrend for CAD.

Australian Dollar Declines on Export Prices: Like the Canadian dollar, the Aussie similarly dropped due to weakening export prices. But the Australian economy isn't nearly as reliant on energy as Canada. In Australia, commodities like ore, gold and other metals, as well as wheat, are the primary exports, and throughout 2017, commodity prices cooled off. Additionally, Australia was also affected by the sluggish Chinese economic growth, as the two economies are closely tied. Due to these circumstances, the Aussie declined about 12 percent compared to the USD.

Dairy Prices Drag Down Kiwi: In New Zealand, diary accounts for roughly 30 percent of the country's commodity exports. Throughout the year, dairy prices were sluggish and in decline, and as a result, the Kiwi took a hit against the U.S. dollar. In 2017, the Kiwi was down about 12 percent compared to the USD.

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