Forex News: Commodity Currencies Climb As Crude Oil Prices Surge

Commodity Currencies Climb As Crude Oil Prices Surge

(RTTNews) - The commodity-linked currencies such as Australia, the New Zealand and the Canadian dollars strengthened against their major currencies in the European session on Monday, as the crude oil prices remained elevated as renewed fighting in Lebanon and further tanker attacks in the Strait of Hormuz clouded prospects for ending the U.S.-Iran war.

Brent crude futures were up 0.8 percent at $89.22 a barrel after climbing 6 percent last week. WTI crude futures rose 0.4 percent to $81.80 a barrel.

Investors braced for further supply disruptions despite Iran and Oman appear to be moving closer to an understanding over the management of the Strait of Hormuz.

At least 11 people were killed in Israeli strikes on southern Lebanon on Saturday, one of the deadlines days of fighting in months, clouding prospects for a ceasefire agreement to end the conflict.

Israel's far-right national security minister, Itamar Ben-Gvir has advocated for killing "30 to 40 people" in Gaza every night and go beyond "those who pose a danger . at that particular moment." Investors kept a close eye on geopolitical developments in the Middle East and pondered the U.S. Federal Reserve's next move on interest rates.

Economic concerns are back in the spotlight after July U.S. retail sales dropped by the largest margin in over a year and a measure of U.S. consumer sentiment fell for the first time in three months amid worries about worsening business conditions and the rising cost of living.

Ahead of the Fed's upcoming Jackson Hole meeting later this month, traders now eagerly await the minutes of last month's FOMC meeting on Wednesday for fresh insights on how board members view inflation and the interest-rate environment.

According to CME's FedWatch tool, expectations for a rate hike at the Fed's September meeting currently stand at about 33 percent.

In other economic news, data showed that China's industrial production increased 4.5 percent on year in July, compared to a 5.3 percent increase in June and less than the 5 percent growth anticipated by markets.

Additionally, retail sales dropped to 0.6 percent on year, down from 1 percent earlier and far short of the projected 1.5 percent gain.

In the European trading today, the Australian dollar rose to nearly a 2-1/2-month high of 0.7130 against the U.S. dollar and nearly a 0.9879 against the Canadian dollar, from early lows of 0.7087 and 0.9829, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.73 against the greenback and 0.99 against the loonie.

Against the yen and the euro, the aussie advanced to near 3-week highs of 113.48 and 1.6262 from early lows of 112.75 and 1.6336, respectively. The aussie may test resistance around 115.00 against the yen and 1.61 against the euro.

The aussie edged up to 1.2041 against the NZ dollar, from an early 5-day low of 1.2001. On the upside, 1.22 is seen as the next resistance level for the aussie.

The NZ dollar rose to nearly a 2-month high of 0.5926 against the U.S. dollar and nearly a 3-week high of 94.30 against the yen, from early lows of 0.5891 and 93.79, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.61 against the greenback and 95.00 against the yen.

Against the euro, the kiwi edged up to 1.6062 from an early 4-day low of 1.6088. The kiwi is likely to find resistance around the 1.59 region.

The Canadian dollar rose to nearly a 2-1/2-month high of 1.3852 against the U.S. dollar and nearly a 3-week high of 114.99 against the yen, from early lows of 1.3872 and 114.64, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.37 against the greenback and 117.00 against the yen.

Against the euro, the loonie edged up to 1.6055 from an early 4-day low of 1.6088. The loonie is likely to find resistance around the 1.59 region.

Looking ahead, U.S. New York Empire state manufacturing index for August and U.S. NAHB housing market index for August are slated for release in the New York session.

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