Commodity Currencies Fall Amid Risk Aversion

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Thursday amid risk aversion, following the broadly negative cues from global markets overnight, as bond yields continued to spike amid uncertainty about the U.S. Fed's interest-rate moves ahead of key inflation data later in the week.

The report on U.S. personal income and spending in the month of April, due on Friday, includes readings on inflation said to be preferred by the U.S. Fed. There are concerns the Fed might keep interest rates higher for longer at the next monetary policy meeting on June 11-12 in the event of U.S. inflation readings coming in hotter than expected.

Weakness across most sectors led by mining, energy and technology stocks, also weighed on the investor sentiment.

Crude oil prices fell on concerns about the outlook for interest rates, and the likely adverse impact high borrowing costs will have on energy demand. West Texas Intermediate Crude oil futures for July sank $0.60 at $79.23 a barrel.

In the Asian trading today, the Australian dollar fell to 6-day lows of 0.6600 against the U.S. dollar and 103.81 against the yen, from yesterday's closing quotes of 0.6611 and 104.18, respectively. If the aussie extends its downtrend, it is likely to find support around 0.64 against the greenback and 101.00 against the yen.

Against the euro and the Canadian dollar, the aussie edged down to 1.6354 and 0.9060 from Wednesday's closing quotes of 1.6334 and 0.9066, respectively. On the downside, 1.65 against the euro and 0.89 against the loonie is seen as the support levels for the aussie.

The NZ dollar fell to 6-day lows of 0.6100 against the U.S. dollar and 95.87 against the yen, from yesterday's closing quotes of 0.6107 and 96.40, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.59 against the greenback and 92.00 against the yen.

Against the euro and the Australian dollar, the kiwi edged down to 1.7698 and 1.0832 from Wednesday's closing quotes of 1.7659 and 1.0806, respectively. The next possible downside target for the kiwi is seen around 1.79 against the euro and 1.10 against the aussie.

The Canadian dollar fell to 6-day low of 1.3728 against the U.S. dollar and 114.41 against the yen, from yesterday's closing quotes of 1.3714 and 114.91. respectively. If the loonie extends its downtrend, it is likely to find support around 1.38 against the greenback and 112.00 against the yen.

Against the euro, the looie edges down to 1.4821 from Wednesday's closing value of 1.4815. The loonie may test support near the 1.50 region.

Meanwhile, the safe-haven currencies such as the Japanese yen and the U.S. dollar fell against their major currencies in the Asian session today amid risk aversion.

The yen rose to a 1-week high of 169.47 against the euro and a 6-day high of 199.31 against the pound, from yesterday's closing quotes of 170.25 and 200.19, respectively. If the yen extends its uptrend, it is likely to find resistance around against the 166.00 against the euro and 197.00 against the pound.

Against the U.S. dollar and the Swiss franc, the yen edged up to 157.05 and 172.09 from Wednesday's closing quotes of 157.60 and 172.59, respectively. The yen is likely to find resistance around 154.00 against the greenback and 171.00 against the franc.

The U.S. dollar rose to more than a 2-week high of 1.0789 against the euro and a 6-day high of 1.2689 against the pound, from yesterday's closing quotes of 1.0800 and 1.2707, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.06 against the euro and 1.25 against the pound.

Looking ahead, Eurozone economic sentiment for May and unemployment data for April are due to be released in the European session at 5:00 am ET.

In the New York session, Canada average weekly earnings for March and current account for the first quarter, U.S. GDP data for the first quarter, weekly jobless claims data, trade balance data for April, pending home sales data for April and U.S. EIA crude oil data are slated for release.