Forex News: Commodity Currency's Slide Amid Risk-off Sentiment

Commodity Currency's Slide Amid Risk-off Sentiment

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Friday, as Asian stock markets traded lower hurt by continued weakness in technology stocks which mirror their peers on the tech-heavy Nasdaq amid concerns about valuations and the impact of artificial intelligence.

Uncertainty about geopolitical and trade conflicts is also weighing on market sentiment.

Crude oil prices plunged after weak U.S. jobs data increased demand concerns. West Texas Intermediate crude for March delivery was down $1.87 or 2.87 percent at $63.27 per barrel.

The commodity-linked AUD, NZD and CAD, which is sometimes regarded as a liquid indicator of mood toward global risk, came under pressure as investor confidence was shaken by a tech-driven market sell-off that was spurred by concerns over excessive AI-related spending.

According to Reserve Bank of Australia (RBA) Governor Michele Bullock, the board raised the Official Cash Rate (OCR) because the economy is more capacity-constrained than previously believed, necessitating stricter policy. Bullock went on to say that until supply capacity can rise more quickly, the RBA must slow demand growth.

In the Asian trading today, the Australian dollar fell to a 2-week low of 0.6897 against the U.S. dollar and a 3-day low of 108.05 against the yen, from yesterday's closing quotes of 0.6927 and 108.78, respectively. If the aussie extends its downtrend, it is likely to find support around 0.67 against the greenback and 107.00 against the yen.

Against the euro and the Canadian dollar, the aussie slid to 4-day lows of 1.7064 and 0.9466 from Thursday's closing quotes of 1.7003 and 0.9498, respectively. The aussie may test support near 1.72 against the euro and 0.93 against the loonie.

The aussie edged down to 1.1633 against the NZ dollar, from Thursday's closing value of 1.1641. On the downside, 1.14 is seen as the next support level for the aussie.

The NZ dollar fell to a 2-week low of 0.5929 against the U.S. dollar and a 4-day low of 92.86 against the yen, from yesterday's closing quotes of 0.5950 and 93.44, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.58 against the greenback and 91.00 against the yen.

Against the euro, the kiwi slipped to a 9-day low of 1.9857 from Thursday's closing value of 1.9793. The kiwi is likely to find support around the 2.01 region.

The Canadian dollar fell to nearly a 2-week low of 1.3725 against the U.S. dollar and a 2-day low of 114.13 against the yen, from yesterday's closing quotes of 1.3712 and 114.53, respectively. If the loonie extends its downtrend, it is likely to find support around 1.39 against the greenback and 112.00 against the yen.

Against the euro, the loonie edged down to 1.6157 from Thursday's closing value of 1.6149. The loonie may test support near the 1.63 region.

Looking ahead, Swiss unemployment rate for January and U.K. BBA mortgage rate data for January are due to be released in the European session.

In the New York session, Canada employment data for January, U.S. University of Michigan's consumer sentiment for February, U.S. Baker Hughes oil rig count data and U.S. consumer credit data for December are slated for release.

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