Forex News: Commodity Currency's Slide As Crude Oil Price Drop

Commodity Currency's Slide As Crude Oil Price Drop

(RTTNews) - The commodity-linked currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Wednesday, after the crude oil prices have moved lower following active shipping movements across the Strait of Hormuz since its reopening, which eased supply disruption concerns.

WTI Crude Oil for August month delivery was last seen trading down at $72.69 per barrel, continuing losses over the previous two sessions, while Brent crude was trading at $76.54 per barrel.

Investors remain cautious as the U.S.-Iran peace agreement to end the Middle East war and the opening of the Strait of Hormuz helped ease regional tensions and saw the oil-linked energy sector tumbling. The slip in gold-linked materials sectors due to high U.S. interest rate concerns pulled down the markets.

The Strait of Hormuz, which remained shut since the U.S.-Iran war began more than three months ago, was reopened after the MoU was signed. Active shipping movements across the Strait of Hormuz eased crude oil supply disruption concerns.

Though Trump confirmed the lifting of U.S. naval blockade on Iranian ports, he did not call off U.S. forces stationed near Iran. Economists are of the opinion that a clear picture shall emerge only after the final deal is signed at the end of 60-day talks.

Iran's U.N. Envoy Ali Bahreini announced that the strait has been opened fully without any tolls or transit fees which will remain in effect over the 60-day ceasefire period.

Today, the Reserve Bank of Australia or RBA Deputy Governor Andrew Hauser of the Reserve Bank of Australia (RBA) stated that the central bank still needs to do more to lower inflation, which is still way too high.

Data from the Australian Bureau of Statistics showed that Australia's consumer price inflation eased in May on cooling fuel prices, but core inflation strengthened further and remained above the central bank target, adding chances of an interest rate hike.

Consumer prices increased 4.0 percent on a yearly basis in May, slower than the 4.2 percent rise in April, reported Wednesday.

This was the slowest inflation in three months and came in below economists' forecast of 4.3 percent.

Meanwhile, trimmed mean inflation rose to 3.6 percent, the highest since September 2024, from 3.4 percent in April. Automotive fuel was excluded from the trimmed mean in March, April and May.

Month-on-month, consumer prices registered a 0.7 percent fall, in contrast to the 0.4 percent increase in April, data showed.

Last week, the Reserve Bank of Australia left its key interest rate unchanged at 4.35 percent after three consecutive rates hikes.

In the Asian trading today, the Australian dollar fell to nearly a 3-month low of 0.6902 against the U.S. dollar, nearly a 2-month low of 1115.51 against the yen and nearly a 2-week low of 0.9814 against the Canadian dollar, from yesterday's closing quotes of 0.6916, 111.75 and 0.9826, respectively. If the aussie extends its downtrend, itis likely to find support around 0.66 against the greenback, 110.00 against the yen and 0.96 against the loonie.

Against the euro, the aussie edged down to 1.6468 from Tuesday's closing value of 1.6456. The aussie may test support near the 1.67 region.

The NZ dollar fell to a 7-month low of 0.5651 against the U.S. dollar, nearly a 3-month low of 91.29 against the yen and nearly a 2-1/2-month low of 2.0114 against the euro, from yesterday's closing quotes of 0.5664, 91.53 and 2.0091, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.54 against the greenback, 90.00 against the yen and 2.04 against the euro.

Against the Australian dollar, the kiwi dropped to 1.2110 from Tuesday's closing value of 1.2209. The kiwi is likely to find support around the 1.23 region.

The Canadian dollar fell to more than a 1-year low of 1.4224 against the U.S. dollar and a 4-month low of 113.60 against the yen, from Tuesday's closing quotes of 1.4210 and 113.73, respectively. If the loonie extends its downtrend, it is likely to find support around 1.43 against the greenback and 111.00 against the yen.

Against the euro, the loonie edged down to 1.6174 from yesterday's closing value of 1.6169. On the downside, 1.63 is seen as the next support level for the loonie.

Looking ahead, Germany Ifo business climate for June and Switzerland economic sentiment index for June are slated for released in the European session.

In the New York session, Canada manufacturing sales data for May, U.S. MBA mortgage approvals data, U.S. current account data for the first quarter, building permits for May, new home sales data for May and U.S. EIA crude oil data are scheduled for release.

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