Commodity Currencies Weaken Amid Risk Aversion On U.S.-China Trade Worries
May 12 2019 - 9:41PM
RTTF2
The commodity currencies such as Australian, New Zealand and
Canadian dollars drifted lower against their major opponents in the
Asian session on Monday amid rising risk aversion on concerns about
the escalating trade war between the U.S. and China.
Trade talks between the countries ended without a resolution
last week and the U.S. hiked tariffs on about $200 billion worth of
Chinese goods after the two countries failed to reach a trade
deal.
Before returning from Washington, Chinese Vice Premier Liu He
remarked that China want U.S. to lift tariffs on Chinese imports as
a condition to reach a deal.
In economic releases, figures from Statistics New Zealand showed
that New Zealand's food price inflation slowed for the second
straight month in April.
The food price index that measures the changes in prices that
households pay for food, climbed 1 percent year-on-year in April,
following March's 1.2 percent increase and February's 1.7 percent
rise.
The aussie dropped to 4-day lows of 0.6973 against the
greenback, 76.49 against the yen and 1.6104 against the euro, from
its early highs of 0.7001, 76.86 and 1.6041, respectively. The
aussie is seen finding support around 0.68 against the greenback,
75.5 against the yen and 1.63 against the euro.
The aussie hit a 6-day low of 0.9371 against the loonie from
Friday's closing value of 0.9386. Next key support for the aussie
is seen around the 0.915 mark.
The Australian currency slipped to 1.0592 against the kiwi, from
an early high of 1.0607, and held steady thereafter. The pair was
worth 1.0601 at Friday's close.
The kiwi also declined to 4-day lows of 0.6577 against the
greenback, 72.18 against the yen and 1.7074 against the euro, off
its early highs of 0.6603, 72.51 and 1.7005, respectively. The kiwi
is likely to find support around 0.64 against the greenback, 70.00
against the yen and 1.72 against the euro.
Simultaneously, the loonie edged down to 1.3444 against the
greenback, 81.53 against the yen and 1.5104 against the euro,
reversing from its early highs of 1.3416, 81.83 and 1.5071,
respectively. The next possible support for the loonie is seen
around 1.36 against the greenback, 80.5 against the yen and 1.52
against the euro.
In today's events, RBA Assistant Governor (Risk Management
Committee) Guy Debelle will participate in a panel discussion
titled "The End of Libor and the Impact on Australian Financial
Markets" at the Reserve Bank of Australia in Sydney at 3:00 am
ET.
Federal Reserve Governor Richard Clarida will deliver a speech
at an event hosted by the Federal Reserve Bank of Boston at 9:05 am
ET.
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