Forex News: Commodity Currencies Recover On Spiking Oil Prices

Commodity Currencies Recover On Spiking Oil Prices

(RTTNews) - The commodity currencies such as the Australia, New Zealand and the Canadian dollars recovered from recent weakness against their major counterparts in the Asian session on Tuesday, as the oil prices surged due to supply concerns following U.S. President Donald Trump's threat of oil taxes against Russia.

The West Texas Intermediate crude oil futures for May delivery was up $0.17 or 0.25 percent to $69.53 per barrel.

Gains across most sectors led by mining and energy stocks amid spiking commodity prices, also led to the upturn of AUD, NZD and CAD.

On the geopolitical front, Trump said he would impose secondary tariffs of 25-50 percent on all Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine.

He also threatened Iran with "bombing" if it fails to agree to a nuclear deal.

Following Trump's threat, Iran has placed its missiles in ready-to-launch mode within underground facilities across the country, designed to withstand airstrikes.

The Australian dollar started recovering from recent lows against its major currencies in the Asian session today, after the Reserve Bank of Australia left its benchmark rate unchanged on Tuesday, lowering it in February.

The policy board of the RBA, governed by Michele Bullock, decided to maintain the cash rate target at 4.10 percent, as widely expected. The interest rate paid on Exchange Settlement balances was also retained at 4 percent.

The bank had reduced the interest rate for the first time since 2020 in February.

In other economic news, the Australian Bureau of Statistics said the value of retail sales in Australia was up a seasonally adjusted 0.2 percent on month in February, coming in at A$37.129 billion. That missed expectations for an increase of 0.3 percent, which would have been unchanged from the January reading. On a yearly basis, retail sales were up 3.6 percent.

Data from S&P Global showed that China's manufacturing sector expanded at the fastest pace in four months in March as output accelerated on the back of a sustained improvement in new orders. The headline Caixin Purchasing Managers' Index rose to 51.2 in March from 50.8 in February.

Meanwhile, traders remain cautious ahead of U.S. reciprocal tariff announcements on its trading partners, primarily the 25 percent tariffs on auto and auto parts imports, which are set to be imposed on Wednesday. Some traders also picked up stocks at a bargain after heavy selling in the previous sessions.

U.S. President Donald Trump's top spokesperson said the announcement would feature "country-based" tariffs but added that the president is also "committed" to implementing sectoral duties at another time.

It is feared that Trump's tariffs and possible retaliatory actions by targeted countries will fuel inflation, keep interest rates elevated and drag down global economic growth. Several key indicators that experts are monitoring suggest that the U.S. was being pushed into a recession.

In the Asian trading today, the Australian dollar rose to 1.7262 against the euro and 93.87 against the yen, from recent lows of 1.7366 and 93.27, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.70 against the euro and 96.00 against the yen.

Against the U.S., the Canada and the New Zealand dollars, the aussie advanced to 0.6270, 0.9011 abd 1.1027 from recent lows of 0.6232, 0.8974 and 1.1004, respectively. The aussie may test resistance around 0.63 against the greenback, 0.91 against the loonie and 1.11 against the kiwi.

The NZ dollar rose to 0.5689 against the U.S. dollar and 85.13 against the yen, from recent lows of 0.5663 and 84.75, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.58 against the greenback and 87.00 against the yen.

Against the euro, the kiwi edged up to 1.9028 from a recent near 3-week low of 1.9112. The next possible upside target for the kiwi is seen around the 1.88 region.

The Canadian dollar rose to 1.4373 against the U.S. dollar and 1.5546 against the euro, from recent near 2-week lows of 1.4400 and 1.5587, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.42 against the greenback and 1.57 against the euro.

Against the yen, the loonie edged up to 102.24 from a recent low of 103.93. On the upside, 106.00 is seen as the next resistance level for the loonie.

Looking ahead, S&P Global manufacturing PMI reports from various European economies and U.K. for March and Eurozone flash inflation data for March and unemployment data for February are slated for release in the European session.

In the New York session, U.S. and Canada S&P Global manufacturing PMI reports for March, U.S. construction spending for February, U.S. ISM manufacturing new orders for March and U.S. Dallas Fed services index for March are slated for release.

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