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Forex News: Commodity Currencies Fall As Most Asian Markets Traded

Commodity Currencies Fall As Most Asian Markets Traded Lower

06/21/2017 - 02:28:00 (RTTNews)

(RTTNews) - Commodity currencies such as the Australian, the New Zealand and the Canadian dollars weakened against their major counterparts in the Asian session on Wednesday, as most Asian stock markets traded lower tracking the weak cues overnight from Wall Street after crude oil futures tumbled into negative territory. Weak earnings outlook from local companies also dented investor sentiment.

Investor reaction was muted to news that U.S. index provider MSCI has decided to add Chinese A-shares into its benchmark Emerging Markets Index. MSCI will add 222 China A shares in the index starting in June 2018.

Crude oil delivery for August is currently down by 0.06 percent or $43.45 per barrel.

The crude oil prices fell amid reports that Nigeria and Libya are ramping up production. The two most vulnerable OPEC nations are exempt from the cartel's supply quota deal with Russia. While some increases in production were expected, the pace of Libya's output is particularly surprising.

Traders await the official report of U.S. crude oil supplies from the Energy Information Administration later in the day. Meanwhile, the American Petroleum Institute reported Tuesday that the U.S. crude supply showed a decline of 2.7 million barrels for the week ended June 16.

The NZ dollar started falling following the disappointing dairy auction results.

In the latest GlobalDairyTrade auction held in the recent session, the dairy prices fell 0.8 percent in the trade-weighted index's first decline since March, with an average selling price of $3,434 per tonne. While prices for whole milk powder, New Zealand's key export, dropped 3.3 percent to US$3,022 a tonne

In other economic news, data from the Westpcac Institutional Bank showed that Australia's leading index softened in May but it continued to signal above trend growth momentum. The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell to 0.62 percent in May from 1.01 percent in April.

Tuesday, the Australian, the New Zealand and the Canadian dollars showed mixed trading against their major counterparts. While the aussie and the kiwi rose against the yen, they fell against the U.S. dollar and the euro.

The Canadian dollar rose against the yen and fell against the U.S. dollar. Against the euro, the loonie held steady.

In the Asian trading, the Australian dollar fell to a 1-week low of 0.7555 against the U.S. dollar and a 5-day low of 84.05 against the yen, from yesterday's closing quotes of 0.7579 and 84.46, respectively. If the aussie extends its downtrend, it is likely to find support around 0.73 against the greenback and 82.00 against the yen.

Against the euro and the NZ dollar, the aussie dropped to 2-day lows of 1.4736 and 1.0457 from yesterday's closing quotes of 1.4688 and 1.0467, respectively. The aussie may test support near 1.50 against the euro and 1.03 against the kiwi.

The aussie edged down to 1.0030 against the Canadian dollar, from yesterday's closing value of 1.0055. On the downside, 0.99 is seen as the next support level for the aussie.

The NZ dollar fell to 5-day lows of 0.7216 against the U.S. dollar and 80.28 against the yen, from yesterday's closing quotes of 0.7240 and 80.69, respectively. If the kiwi extends its downtrend, it may find support around 0.71 against the greenback and 78.00 against the yen.

Against the euro, the kiwi edged down to 1.5429 from yesterday's closing value of 1.5375. On the downside, 1.58 is seen as the next support level for the kiwi.

The Canadian dollar fell to a 5-day low of 83.75 against the yen, from yesterday's closing value of 84.00. The loonie is likely to find support around the 82.00 region.

Against the U.S. dollar and the euro, the loonie dropped to 1.3283 and 1.4791 from yesterday's closing quotes of 1.3267 and 1.4771, respectively. If the loonie extends its downtrend, it could find support around 1.35 against the greenback and 1.51 against the euro.

Meanwhile, the safe-haven yen fell against its major rivals amid rising risk aversion.

In economic news, members of the Bank of Japan's monetary policy board said the country's economic recovery continues, although its pace has been somewhat delayed, minutes from the bank's April 26-27 meeting revealed on Wednesday. There remains considerable uncertainty in overseas economies, the bank said, and downside risks to Japanese economic activity remain.

The yen rose to a 5-day high of 123.84 against the euro and a 6-day high of 140.46 against the pound, from yesterday's closing quotes of 124.05 and 140.70, respectively. If the yen extends its uptrend, it is likely to find resistance around 122.00 against the euro and 138.00 against the pound.

Against the U.S. dollar and the Swiss franc, the yen advanced to 2-day highs of 111.19 and 114.12 from yesterday's closing quotes of 111.43 and 114.31, respectively. The yen is likely to find resistance around 108.00 against the greenback and 112.00 against the franc.

Looking ahead, U.K. public sector finance data for May is due to be released at 4:30 am ET.

At 7:00 am ET, Bank of England Chief Economist Andy Haldane is expected to speak in Yorkshire.

In the New York session, U.S. existing home sales data for May and U.S. crude oil inventories data are slated for release.

For comments and feedback: contact editorial@rttnews.com

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