Commodity Currencies Slide Amid Risk-on Mood
11/26/2025 - 02:52:00 (RTTNews)
(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars strengthened against their major currencies in the Asian session on Wednesday, as Asian stock markets traded higher amid renewed optimism about an interest rate cut by the U.S. Fed in December following the release of softer-than-expected US economic data and the recent dovish comments from US Fed officials.
Reports showed a substantial deterioration by U.S. consumer confidence in November and a lesser than expected US retail sales growth in September.
CME Group's FedWatch Tool indicates the chances the Fed will cut interest rates by another quarter point next month have surged to 82.7 percent from 50.1 percent a week ago.
The NZ dollar traded higher against its major rivals in the Asian session, after the Reserve Bank of New Zealand reduced its benchmark rate by a quarter-point, to spur economic recovery.
The Monetary Policy Committee, chaired by Christian Hawkesby, voted 5-1 to cut the overnight cash rate by 25 basis points to 2.25 percent.
The bank has lowered the rate by 325 basis points since August 2024. With the latest reduction, the OCR hit the lowest since mid-2022.
At the meeting, the policymakers discussed the options of holding the OCR at 2.5 percent and lowering the OCR to 2.25 percent.
In other economic news, data from the Australian Bureau of Statistics showed that the value of total construction work done in Australia was down a seasonally adjusted 0.7 percent on quarter in the third quarter of 2025, coming in at A$79.278 billion. That missed forecasts for an increase of 0.4 percent following the 3.0 percent gain in the previous three months.
On a yearly basis, total construction work was up 2.9 percent.
Building work done rose 4.0 percent on quarter and 6.5 percent on year to A$43.261 billion. Engineering work done fell 5.8 percent on quarter and 1.2 percent on year to A$36.016 billion.
Also, the ABS reported that Australia's inflation accelerated in October largely driven by higher electricity costs. The monthly CPI rose 3.8 percent year-on-year in October after a 3.6 percent increase in September. Prices were expected to rise again by 3.6 percent.
On a monthly basis, consumer prices remained flat in October, following September's 0.5 percent rise.
In the Asian trading today, the Australian dollar rose to a 5-day high of 101.61 against the yen and a 2-day high of 1.7803 against the euro, from yesterday's closing quotes of 100.96 and 1.7886, respectively. If the aussie extends its uptrend, it is likely to find resistance around 102.00 against the yen and 1.75 against the euro.
Against the U.S. and the Canadian dollars, the aussie advanced to a 1-week high of 0.6509 and nearly a 2-week high of 0.9161 from Tuesday's closing quotes of 0.6469 and 0.9120, respectively. The aussie may test resistance around 0.66 against the greenback and 0.92 against the loonie.
The NZ dollar rose to nearly a 4-month high of 88.89 against the yen and nearly a 3-week high of 2.0335 against the euro, from yesterday's closing quotes of 87.72 and 2.0584, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 89.00 against the yen and 1.99 against the euro.
Against the U.S. and the Australian dollars, the kiwi advanced to more than 3-week highs of 0.5697 and 1.1408 from Tuesday's closing quotes of 0.5621 and 1.1509, respectively. On the upside, 0.57 against the greenback and 1.11 against the aussie are seen as the next resistance levels for the kiwi.
The Canadian dollar rose to a 6-day high of 1.4071 against U.S. dollar, from Tuesday's closing value of 1.4097. The loonie is likely to find resistance around the 1.39 region.
Against the yen and the euro, the loonie edged up to 110.99 and 1.6298 from yesterday's closing quotes of 110.70 and 1.6311, respectively. If the loonie extends its uptrend, it is likely to find resistance around 113.00 against the yen and 1.61 against the euro.
Meanwhile, the safe-haven currencies such as the U.S. dollar and the yen fell against their major currencies in the Asian trading session, as Asian shares traded lower amid rising expectation of U.S. Fed rate cut for next month.
The U.S. dollar fell to 1-week lows of 1.1596 against the euro and 155.65 against the yen, from yesterday's closing quotes of 1.1571 and 156.06, respectively. If the greenback extends its downtrend, it is likely to find support around 1.16 against the euro and 152.00 against the yen.
Against the Swiss franc, the greenback dropped to a 5-day low of 0.8043 from Tuesday's closing value of 0.8075. On the downside, 0.79 is seen as the next support level for the greenback.
The greenback edged down to 1.3198 against the pound, from yesterday's closing value of 1.3167. The next possible downside target for the greenback is seen around the 1.33 region.
The yen fell to a 2-day low of 181.07 against the euro, from yesterday's closing value of 180.57. On the downside, 182.00 is seen as the next support level for the yen.
In economic news, data from the Bank of Japan showed that the producer prices in Japan were up 2.7 percent on year in October. That was in line with expectations and down from 3.1 percent on September.
On a monthly basis, producer prices rose 0.6 percent, again matching forecasts and up from 0.1 percent in the previous month.
Against the Swiss franc and the pound, the yen edged down to 194.11 and 206.05 from Tuesday's closing quotes of 193.26 and 205.48, respectively. If the yen extends its downtrend, it is likely to find support around 197.00 against the franc and 208.00 against the pound.
Looking ahead, U.K. Autumn Forecast statemen, U.S. MBA mortgage approvals data, U.S. durable goods orders for September building permits for September, personal income and spending data for September, wholesale inventories for August, U.S. weekly jobless claims data, U.S. EIA crude oil data, U.S. Chicago Fed National Activity for October, U.S. Beige book report and U.S. Baker Hughes oil rig count data are slated for release in the New York session.
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