Commodity Currencies Decline Against Majors
February 06 2019 - 10:18PM
RTTF2
The commodity currencies such as Australian, New Zealand and
Canadian dollars fell against their major counterparts in the Asian
session on Thursday, as oil prices declined on rising crude
inventories and as a weak U.S. economic data released overnight
stoked concerns about the economy.
Data from Energy Information Administration showed that crude
inventories increased by 1.26 million barrels last week. Economists
were expecting an increase of 2.2 million barrels. Crude
inventories had risen by 920,000 barrels in the previous week.
Gasoline stocks were up by 510,000 barrels in the week.
Meanwhile, distillate stockpiles dropped by a larger than expected
2.3 million barrels.
The data came a day after API data showing a build of 2.5
million barrel U.S. crude inventories last week.
The Institute of Supply Management's U.S. non-manufacturing
index fell to a six-month low of 56.7 in January, down from
expectations for a reading of 57.0.
The indications of economic slowdown coupled with unresolved
trade dispute with China kept investors' cautious.
In economic news, the latest survey from the Australian Industry
Group revealed that the construction sector in Australia continued
to contract in January, albeit at a slower pace, with a Performance
of Construction Index score of 43.1.
That's up from 42.6 in December, although it remains well
beneath the boom-or-bust line of 50 that separates expansion from
contraction.
The aussie dropped to 0.9381 against the loonie, its lowest
since January 3. On the downside, 0.92 is possibly seen as the next
support level for the aussie.
The Australian currency slipped to near 2-week lows of 0.7093
against the greenback and 77.88 against the yen, reversing from its
early highs of 0.7114 and 78.25, respectively. The next possible
support for the aussie is seen around 0.69 against the greenback
and 76.00 against the yen.
The aussie dipped to a 2-week low of 1.6015 against the euro,
from a high of 1.5970 touched at 9:45 pm ET. If the aussie falls
further, 1.62 is possibly seen as its next support level.
The kiwi fell to a 2-day low of 1.0528 against the aussie,
following an advance to 1.0481 at 5:00 pm ET. The kiwi is poised to
test support around the 1.07 region.
Pulling away from its early highs of 0.6778 against the
greenback and 1.6762 against the euro, the kiwi slipped to new
2-week lows of 0.6744 and 1.6843, respectively. Next key support
for the kiwi is seen around 0.655 against the greenback and 1.70
against the euro.
The kiwi declined to near a 2-week low of 74.12 against the yen,
reversing from a high of 74.53 hit at 5:00 pm ET. Continuation of
the kiwi's weakness may take it to a support around the 73.00
region.
The loonie slipped to 6-day lows of 1.5048 against the euro and
82.89 against the yen, coming off from its early highs of 1.5002
and 83.28, respectively. The loonie is likely to challenge support
around 1.52 against the euro and 81.00 against the yen, if it drops
further.
Having advanced to 1.3204 against the greenback at 5:00 pm ET,
the loonie reversed direction and fell to an 8-day low of 1.3245.
Further downtrend may take the loonie to a support around the 1.34
level.
Looking ahead, U.K. Halifax house price index for January is due
in the European session.
At 7:00 am ET, the Bank of England announces its decision on
interest rate. Economists expect the benchmark rate to remain at
0.75 percent and asset purchase facility at GBP 435 billion.
In the New York session, U.S. weekly jobless claims for the week
ended February 2 and consumer credit for December are due.
At 9:30 am ET, Federal Reserve Governor Richard Clarida will
deliver a speech about the neutral interest rate at the Czech
National Bank conference in Prague.
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