Commodity Currencies Slide As Crude Oil Price Falls

Commodity currencies such as the Australian, the New Zealand and the Canadian dollars weakened against other majr currencies in the Asian session on Wednesday, as crude oil price fell after a report said OPEC produce rose in June despite the cartel’s supply quota plan.

Crude oil delivery for September is currently up by 0.33 percent or $48.83 per barrel.

OPEC oil output jumped by 90,000 barrels per day (bpd) to a 2017 high, a Reuters survey found.

Much of the increase was due to surging output from Libya. Supplies from Iraq also rose, helping to offset Saudi cuts.

Meanwhile, the NZ dollar fell after data showed that the overall employment in the nation fell more-than-expected on quarter.

Data from Statistics New Zealand showed that the overall employment in New Zealand fell 0.2 on quarter, missing forecasts for a gain of 0.7 percent following the 1.1 percent increase in the three months prior.

On a yearly basis, employment gained 3.1 percent, missing expectations for 4.1 percent and down from 5.7 percent in Q1.

The unemployment rate in New Zealand came in at a seasonally adjusted 4.8 percent in the second quarter of 2017. That was in line with expectations and down from 4.9 percent in the previous three months.

In other economic news, data from the Australian Bureau of Statistics showed that the total number of building approvals increased at a faster-than-expected pace in June, after declining in the previous month. The seasonally adjusted estimate for total dwellings approvals surged 10.9 percent month-over-month in June, reversing a 5.4 percent decrease in May. That was well above the 1.0 percent rise economists had forecast.

On a yearly basis, total building approvals dropped a seasonally adjusted 2.3 percent in June, much slower than the expected decline of 11.0 percent.

In the Asian trading, the Australian dollar fell to nearly a 3-week low of 1.4885 against the euro, from yesterday’s closing value of 1.4809. The aussie may test support near the 1.50 region.

Against the U.S. dollar and the yen, the aussie dropped to a 5-day low of 0.7941 and a 9-day low of 87.79 from yesterday’s closing quotes of 0.7969 and 87.96, respectively. If the currency extends its downtrend, it is likely to find support around 0.78 against the greenback and 86.00 against the yen.

The NZ dollar fell to more than a 2-month low of 1.5933 against the euro and more than a 2-week low of 81.89 against the yen, from yesterday’s closing quotes of 1.5799 and 82.42, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.60 against the euro and 80.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi dropped to a 1-week low of 0.7416 and nearly a 2-week low of 1.0728 from yesterday’s closing quotes of 0.7468 and 1.0669, respectively. The currency may test support near 0.72 against the greenback and 1.08 against the aussie.

The Canadian dollar fell to nearly a 5-week low of 1.4881 against the euro and nearly a 2-week low of 1.2586 against the U.S. dollar, from yesterday’s closing quotes of 1.4790 and 1.2539, respectively. If the loonie extends its downtrend, it may find support around 1.50 against the euro and 1.28 against the greenback.

Against the Australian dollar and the yen, the loonie dropped to 1.0014 and 87.91 from yesterday’s closing quotes of 0.9989 and 88.02, respectively. It may test support near 1.01 against the aussie and 86.00 against the yen.

Looking ahead, Swiss retail sales data for June and SVME PMI data for July, U.K. Markit/CIPS construction PMI for July and Eurozone PPI for June are due to be released later in the day.

In the New York session, U.S. ADP private sector jobs data for July and U.S. crude oil inventories data are slated for release.

At 11:00 am ET, Federal Reserve Bank of Cleveland President Loretta Mester is expected to speak before the Community Bankers Association of Ohio Annual Convention, in Cincinnati.

At 3:30 am ET, Federal Reserve Bank of San Francisco President John Williams is scheduled to speak on “Monetary Policy’s Role in Fostering Sustainable Growth” before the Economic Club of Las Vegas.

The material has been provided by InstaForex Company – www.instaforex.com

Source:: Commodity Currencies Slide As Crude Oil Price Falls

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