Forex News: Commodity Currencies Slide Amid Middle East War

Commodity Currencies Slide Amid Middle East War

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major counterparts in the European session on Friday, amid the raging war in the Middle East as Iran toughens its stand. The resultant spike in energy stocks amid surging in crude oil prices is helping limit the losses in the markets in the region.

The new leadership in Iran refused to bow down to U.S. pressure and instead vowed revenge, threatening U.S. allies, and resolving to ramp up attacks. Iran's new Supreme Leader Mojtaba Khamenei vowed to avenge those killed in Iran's war against the U.S.-Israeli joint forces and also said the Strait of Hormuz must remain closed as a "tool to pressure the enemy."

Khamenei also warned its neighboring Arab nations of severe attacks if they host U.S. military forces and demanded closure of the bases.

Iran has targeted oil fields and refineries in Gulf Arab nations and effectively stopped cargo traffic through the narrow Strait of Hormuz in a bid to exert pressure on the United States and Israel to end the war. Iran also continued to target commercial vessels of various nations and carried its missile, and drone strikes on Arab neighbors.

Energy Secretary Chris Wright told CNBC in an interview that the U.S. Navy is "not ready" to escort oil tankers through the strait. There are reports of three more foreign ships struck in the Persian Gulf overnight, adding to concerns about transit through the strategically vital Strait of Hormuz.

The Middle East war that began following the U.S.-Israeli combined attacks on Iran on February 28 entered day number 14 today without any sign of a de-escalation. In economic news, data from BusinessNZ showed that the manufacturing sector in New Zealand continued to expand in February, albeit it at a barely slower pace, with a Performance of Manufacturing Index score of 55.0. That's down from 55.1 in January, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.

In the European trading today, the Australian dollar fell to a 4-day low of 0.7026 against the U.S. dollar, from an early high of 0.7093. If the aussie extends its downtrend, it is likely to find support around the 0.69 region.

Against the yen, the euro and the Canadian dollar, the aussie slipped to 3-day lows of 112.04, 1.6328 and 0.9599 from early highs of 112.89, 1.6252 and 0.9661, respectively. On the downside, 110.00 against the yen, 1.67 against the euro and 0.95 against the loonie are seen as the next support levels for the aussie.

The NZ dollar depreciated to a 13-year low of 1.2121 against the Australian dollar and nearly a 2-month low of 0.5806 against the U.S. dollar, from early highs of 1.2082 and 0.5862, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.22 against the aussie and 0.56 against the greenback.

Against the yen and the euro, the kiwi slid to 4-day lows of 92.56 and 1.9769 from early highs of 93.27 and 1.9665, respectively. The next possible downside target for the kiwi is seen around 91.00 against the yen and 1.99 against the euro.

The Canadian dollar fell to a 1-week low of 1.3716 against the U.S. dollar, from an early high of 1.3668. If the loonie extends its downtrend, it is likely to find support around the 1.38 area.

Against the yen, the loonie slipped to a 2-day low of 116.63 against yen, from an early high of 117.02. On the downside, 115.00 is seen as the next support level for the loonie.

Meanwhile, the loonie rose to a 4-day high of 1.5621 against the euro, from early low of 1.5706. The loonie may test resistance around the 1.55 region.

Looking ahead, Eurozone industrial production for January and U.K. NIESR Monthly GDP Tracker for February are set to be published in the European session.

In the New York session, Canada jobs data for February, manufacturing sales data for January, U.S. core PCE price index, durable goods order, personal income and spending data, all for January, U.S. University of Michigan's consumer sentiment for March and U.S. Baker Hughes oil rig count data are slated for release.

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