Forex News: Commodity Currencies Rise Amid Renewed Tariff Concerns; USD

Commodity Currencies Rise Amid Renewed Tariff Concerns; USD Slide

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars strengthened against their major counterparts in the early European session on Thursday, as traders are optimistic about an end to the tariff uncertainty after U.S. President Donald Trump made it clear that he will not extend the August 1 deadline for trade deals, though he gets aggressive with tariff imposition. They are also optimistic about a potential trade deal between the U.S. and the European Union.

Investors await new updates on a deal between the U.S. and the European Union, following Trump's recent remarks that the 27-nation bloc had become much more cooperative.

EU trade chief Maros Sefcovic said there was good progress on a framework trade agreement and a deal may even be possible within days.

Trump escalated his tariff campaign, sending letters to six additional countries-Algeria, Iraq, Libya, Brunei, Moldova, and the Philippines-with fresh import duties ranging from 20-30 percent.

The diplomatic relations between the U.S. and Brazil hit an all-time low after Trump slapped a 50 percent tariff on Brazilian goods in response to Brazil's trial of Jair Bolsonaro.

Meanwhile, the U.S. Fed's minutes of its June monetary policy meeting revealed that most participants generally agree the central bank is well positioned to wait for more clarity on the outlook for inflation and the economy before adjusting interest rates.

The Fed's "wait and see" approach comes as participants said economic growth and the labor market remain solid and described monetary policy as moderately or modestly restrictive.

Traders looked ahead to the weekly jobless claims report and Federal Reserve officials' speeches scheduled for later in the day after the latest Fed meeting minutes showed little support for an interest rate cut later this month.

Crude oil prices inched higher, as Saudi projections for increased demand were offset by a jump in U.S. oil inventories. West Texas Intermediate crude for August delivery ticked higher by $0.05 to settle at $68.38 per barrel.

In the early European trading today, the Australian dollar rose to a 6-day high of 1.7879 against the euro, from an early low of 1.7966. The aussie may test resistance around the 1.77 region.

The aussie advanced to 95.93 against the yen, from an early 2-day low of 95.39. On the upside, 96.00 is seen as the next resistance level for the aussie.

Against the U.S. and the Canadian dollars, the aussie climbed to 3-day high of 0.6559 and 0.8967 from early lows of 0.6534 and 0.8942, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.67 against the greenback and 0.90 against the loonie.

The aussie edged up to 1.0904 against the NZ dollar, from an early low of 1.0892. The next possible upside target for the aussie is seen around the 1.10 region.

The NZ dollar rose to a 2-day high of 0.6021 against the U.S. dollar, from an early low of 0.5998. The kiwi may test resistance around the 0.61 region.

The kiwi advanced to 88.07 against the yen, from an early 2-day low of 87.56. The next possible upside target for the kiwi is seen around the 89.00 region.

Against the euro, the kiwi edged up to 1.9490 from an early low of 1.9572. On the upside, 1.92 is see as the next resistance level for the kiwi.

The Canadian dollar rose to 1.3664 against the U.S. dollar, from an early low of 1.3689. The next upside target for the loonie is seen around the 1.34 region.

Against the yen and the euro, the loonie edged up to 107.17 and 1.6025 from an early 3-day low of 106.58 and an 8-day low of 1.6072, respectively. If the loonie extend its uptrend, it is likely to find resistance around 108.00 against the yen and 1.58 against the euro.

Meanwhile, the safe-haven U.S. dollar weakened against other major currencies in the Asian trading amid renewed U.S. tariff concerns.

The U.S. dollar fell to a 1-week low of 0.7920 against the Swiss franc, a 3-day low of 145.76 against the yen and a 2-day low of 1.1750 against the euro, from early highs of 0.7951, 146.47 and 1.1726, respectively. If the greenback extends its downtrend, it is likely to find support around 0.78 against the franc, 142.00 against the yen and 1.18 against the euro.

Against the pound, the greenback edged down to 1.3620 from an early high of 1.3595. The greenback may test support near the 1.38 region.

Looking ahead, U.S. weekly jobless claims data is due to be released in the New York session.

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