Forex News: Commodity Currency's Slide Amid US-China Trade Tensions

Commodity Currency's Slide Amid US-China Trade Tensions

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Tuesday, due to ongoing trade concerns between the United States and China.

The U.S. and China will start collecting port fees on each other's vessels from today in tit-for-tat move that threatens global shipping and trade flows. Due to tight commercial relationship with China, the currencies such as AUD, NZD and CAD are negatively impacted by tensions in the former.

U.S. Treasury Secretary Scott Bessent said he still expects Presidents Donald Trump and Xi Jinping will meet but warned that all options remain open for retaliating against China's move to tighten exports of rare earths.

China's commerce ministry said it remained open to talks, but the U.S. cannot seek dialogue while threatening new measures.

"If you wish to fight, we shall fight to the end; if you wish to negotiate, our door remains open," according to an official statement.

Also, Beijing reportedly said it was Washington's expansion of curbs on Chinese firms in late September that ratcheted up tensions and drove it to further tighten its grip on the critical minerals.

According to today's RBA minutes, economic vulnerabilities are still there, and consumption is nonetheless sluggish despite slower job and pay growth.

The crude oil prices were marginally lower after rising sharply following reports of a possible meeting between the U.S. and Chinese Presidents later this month.

In the Asian trading today, the Australian dollar fell to more than a 1-1/2-month low of 0.6463 against the U.S. dollar, from yesterday's closing value of 0.6512. The aussie may test support near the 0.63 region.

The aussie slid to a 4-day low of 98.05 against the yen, from a recent 4-day high of 99.49. On the downside, 96.00 is seen as the next support level for the aussie.

Against the euro and the NZ dollar, the aussie dropped to 1.7937 and 1.1345 from recent 4-day highs of 1.7719 and 1.1395, respectively. If the aussie extends its downtrend, it is likely to find support around 1.81 against the euro and 1.12 against the kiwi.

The aussie edged down to 0.9077 against the Canadian dollar, from Monday's closing value of 0.9142. The next possible downside target for the aussie is seen around the 0.89 region.

The NZ dollar declined to a 16-year low of 2.0351 against the euro, from yesterday's closing value of 2.0231. On the downside, 2.04 is seen as the next support level for the kiwi.

Against the U.S. dollar and the yen, the kiwi slid to a 6-month low of 0.5695 and nearly a 2-week low of 86.41 from Monday's closing quotes of 0.5717 and 87.16, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.55 against the greenback and 85.00 against the yen.

The Canadian dollar fell to a 6-month low of 1.4055 against the U.S. dollar and a 4-day low of 1.6283 against the euro, from yesterday's closing quotes of 1.4040 and 1.6237, respectively. If the loonie extends its downtrend, it is likely to find support around 1.44 against the greenback and 1.64 against the euro.

Against the yen, the loonie edged down to 107.95 from Monday's closing value of 108.60. The loonie may test support near the 105.00 region.

Looking ahead, Canada building permits for August, U.S. NFIB business optimism index for September and U.S. Redbook reports is slated for release in the New York session.

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