Forex News: Commodity Currencies Drop As Asian Stock Markets Traded

Commodity Currencies Drop As Asian Stock Markets Traded Lower

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Tuesday, as Asian shares traded lower dragged by the tumbling Hong Kong market. Traders also reassessed their expectations for the outlook on interest rates after upbeat U.S. jobs data. Escalating tensions in the Middle East is also weighing on market sentiment.

The Australian dollar fell after the remarks made by Zheng Shanjie, the chairman of China National Development and Reform Commission at the press conference. The investors were disappointed over the lack of concrete information regarding the extent of Beijing's newly announced stimulus program.

Traders also now cautiously await readings on U.S. consumer price and producer price inflation later in the week for further cues.

On the geopolitical front, Israeli defense forces intensified air strikes targeting Gaza and the Lebanese capital of Beirut simultaneously on the first anniversary of Hamas' cross-border attack in Israel, which triggered the Middle East war.

The Reserve Bank of New Zealand (RBNZ) is due to announce its monetary policy decision on Wednesday, where markets widely anticipate it to cut interest rates by 50 basis points to 4.75 percent. In the Asian trading now, the Australian dollar fell to more than a 2-week low of 1.6341 against the euro, a 6-day low of 99.09 against the yen and a 4-day low of 1.0988 against the NZ dollar, from yesterday's closing quotes of 1.6239, 100.13 and 1.1030, respectively. If the aussie extends its downtrend, it is likely to find support around 1.65 against the euro, 96.00 against the yen and 1.08 against the kiwi.

Against the U.S. and the Canadian dollars, the aussie slipped to more than 3-week lows of 0.6715 and 0.9155 from Monday's closing quotes of 0.6757 and 0.9200, respectively. The aussie may test support near 0.65 against the greenback and 0.90 against the loonie.

The NZ dollar fell to nearly a 3-week low of 1.7967 against the euro, from yesterday's closing value of 1.7914. The next possible downside target is seen around the 1.81 region.

Against the U.S. dollar and the yen, the kiwi slid to nearly a 4-week low of 0.6108 and a 6-day low of 90.12 from Monday's closing quotes of 0.6124 and 90.75, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.59 against the greenback and 88.00 against the yen.

The Canadian dollar fell to 4-day lows of 108.21 against the yen and 1.4966 against the euro, from yesterday's closing quotes of 108.80 and 1.4942, respectively. If the loonie extends its downtrend, it is likely to find support around 104.00 against the yen and 1.52 against the euro.

Against the U.S. dollar, the loonie edged down to 1.3635 from Monday's closing value of 1.3616. On the downside, 1.37 is seen as the next support level for the loonie.

Looking ahead, U.S. Sep NFIB business optimism index for September and U.S. and Canada trade data for August, are slated for release in the New York session.

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