Forex News: Commodity Currencies Rise After China Rate Decision

Commodity Currencies Rise After China Rate Decision

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars strengthened against other major currencies in the Asian session on Monday, following the People's Bank of China's (PBOC) decision to maintain its interest rate stability.

The People's Bank of China left its benchmark interest rates unchanged for the fifth straight month despite slowing economic growth.

The PBoC retained its one-year loan prime rate at 3.0 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was maintained at 3.50 percent.

In economic news, data from the National Bureau of Statistics showed that China's economy logged a slower growth in the third quarter. Gross domestic product expanded 4.8 percent on a yearly basis in the third quarter after rising 5.2 percent a quarter ago. Nonetheless, the pace of growth was slightly better than forecast of 4.7 percent.

On a quarterly basis, GDP was up 1.1 percent, which was bigger than the expected growth of 0.8 percent.

In September, industrial output climbed 6.5 percent from a year ago, much faster than the 5.2 percent growth posted in August.

However, annual growth in retail sales eased to 3.0 percent from 3.4 percent in the previous month. Sales were forecast to grow 2.9 percent.

During January to September, fixed asset investment dropped 0.5 percent after rising 0.5 percent in the January to August period. Economists had forecast a marginal growth of 0.1 percent.

Data from Statistics New Zealand showed that the consumer prices in New Zealand were up 3.0 percent on year in the third quarter of 2025, in line with expectations and up from 2.7 percent in the three months prior.

On a seasonally adjusted quarterly basis, inflation rose 1.0 percent - exceeding forecasts for 0.8 percent and doubling from 0.5 percent in the previous quarter.

In addition, worries about how an extended US government shutdown would impact the economy by weakening the USD and influence the AUD, NZD and CAD. The ongoing US government shutdown, which has continued into its 19th day with no end in sight, is the reason behind the decrease in the greenback. Senators failed to break the impasse during Thursday's votes for the tenth time. In contemporary U.S. history, it is currently the third-longest funding break.

Asian stock markets traded mostly higher, as traders remain optimistic on easing trade tensions between the U.S. and China after U.S. President Donald Trump said the high tariffs; he has threatened on Chinese imports are probably not sustainable but argued "they forced me to do that.

Trump confirmed he would meet with Chinese President Xi Jinping at a summit in South Korea later this month after previously casting doubt on whether the planned meeting would be worthwhile.

Reports emerged earlier that the U.S. may impose up to 500 percent tariffs on China over rare earth limits and Russian oil, risking global trade turmoil.

Crude oil prices rose after Trump suddenly reversed his hardline stance on China, suggesting warmer trade relations could lead to an increase in energy demand. West Texas Intermediate crude for November delivery was up by $0.20 or 0.35 percent at $57.66 per barrel.

In the Asian trading today, the Australian dollar rose to 4-day highs of 1.7909 against the euro and 98.48 against the yen, from last week's closing quotes of 1.7934 and 97.87, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.76 against the euro and 101.00 against the yen.

Against the U.S. and the Canadian dollars, the aussie advanced to 4-day highs of 0.6515 and 0.9126 from Friday's closing quotes of 0.6497 and 0.9110, respectively. The aussie may resistance around 0.66 against the greenback and 0.93 against the loonie.

The NZ dollar rose to 4-day highs of 86.79 against the yen and 2.0315 against the euro, from Friday's closing quotes of 86.27 and 2.0347, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 88.00 against the yen and 2.01 against the euro.

Against the U.S. and the Australian dollars, the kiwi edged up to 0.5744 and 1.1333 from last week's closing quotes of 0.5727 and 1.1346, respectively. On the upside, 0.59 against the greenback and 1.12 against the aussie are seen as the next resistance levels for the kiwi.

The Canadian dollar rose to a 1-week high of 1.4006 against the U.S. dollar and a 5-day high of 107.93 against the yen, from Friday's closing quotes of 1.4021 and 107.44, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.38 against the greenback and 109.00 against the yen.

Against the euro, the loonie edged up to 1.6335 from a recent low of 1.6357. The next possible upside target for the loonie is seen around the 1.61 region.

Looking ahead, Eurozone current account data and construction output for August are due to be released in the European session.

In the New York session, Canada PPI and raw material prices for September, U.S. Consumer Board's leading index for September, are slated for release.

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