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Forex News: Commodity Currencies Slide Amid Risk Aversion

Commodity Currencies Slide Amid Risk Aversion

03/27/2024 - 03:00:00 (RTTNews)

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Wednesday amid risk aversion, as traders continued to be cautious and look ahead to key U.S. and European inflation readings later in the week and comments from central bank officials for additional clues on the interest rate outlook.

Traders also were concerned about the economic impact of the indefinite suspension of vessel traffic into and out of the Port of Baltimore. Vessel traffic was suspended after a cargo ship crashed into a pillar of the Francis Scott Key Bridge early Tuesday morning, leading to the bridge's collapse.

The Australian dollar started falling against its major rivals, after the release domestic inflation data that beat market expectations, and the reading is the lowest since November 2021.

Data from the Australian Bureau of Statistics showed that the monthly consumer price index rose by 3.4 percent annually in February, the same as in previous month but slightly below economists' forecast of 3.5 percent.

Trading volumes are likely to remain thin as investors brace for the Easter weekend.

Oil extended overnight losses as the API report showed a large build in U.S. inventories. Crude oil prices settled lower with traders assessing oil demand and supply positions amid the tensions in the Middle East. West Texas Intermediate Crude oil futures for May ended lower by $0.33 at $81.62 a barrel.

In the Asian trading today, the Australian dollar fell to a 5-day low of 1.6622 against the euro, from yesterday's closing value of 1.6567. The aussie may test support near the 1.67 region.

Against the U.S. dollar and the yen, the aussie slipped to 2-day lows of 0.6511 and 98.74 from Tuesday's closing quotes of 0.6538 and 99.00, respectively. If the aussie extends its downtrend, it is likely to findc support around 0.64 against the greenback and 97.00 against the yen.

Against the Canada and the New Zealand dollars, the aussie slid to 5-day lows of 0.8854 and 1.0868 from yesterday's closing quotes of 0.8880 and 1.0884, respectively. On the downside, 0.87 against the loonie and 1.07 against the kiwi are seen as the next support level for the aussie.

The NZ dollar fell to more than a 4-month low of 1.8078 against the euro and a 2-day low of 0.5988 against the U.S. dollar, from Tuesday's closing quotes of 1.8032 and 0.6007, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.82 against the euro and 0.58 against the greenback.

Against the yen, the kiwi edged down to 90.79 from yesterday's closing value of 90.96. The kiwi is likely to find support around the 89.00 region.

The Canadian dollar fell to a 2-day low of 1.3599 against the U.S. dollar, from yesterday's closing value of 1.3582. The loonie is likely to find support around the 1.36 region.

Against the euro and the yen, the loonie dropped to 1.4723 and 111.41 from Tuesday's closing quotes of 1.4711 and 111.51, respectively. If the loonie extends its downtrend, it is likely to find support around 1.48 against the euro and 110.00 against the yen.

Meanwhile, the U.S. dollar rose against its major rivals in the Asian session amid risk aversion.

The U.S. dollar appreciated to a 34-year high of 151.97 against the yen, from Tuesday's closing value of 151.52. The greenback may test resistance near the 153.00 region.

Against the euro and the pound, the greenback rose to 2-day highs of 1.0820 and 1.2609 from yesterday's closing quotes of 1.0833 and 1.2628, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.07 against the euro and 1.25 against the pound.

The greenback edged up to 0.9403 against the Swiss franc, from an early low of 0.9033. On the upside, 0.91 is seen as the next resistance level for the greenback.

Looking ahead, the European Commission is set to release euro area economic sentiment survey results for March at 6:00 am ET in the European session on Wednesday.

In the New York session, U.S. MBA mortgage approvals data and U.S. EIA crude oil data are slated for release.

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