Commodity Currency's Slide On Disappointing China Data, Trump's Tariff Threats

(RTTNews) - The commodity currencies weakened against Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Monday, after the release of disappointing Chinese industrial profits, manufacturing and non-manufacturing data and as worries persist over U.S. President Donald Trump's trade and immigration policies.

Data from the National Bureau of Statistics showed that the manufacturing sector in China fell into contraction in January, with a manufacturing PMI score of 49.1. That missed expectations for a reading of 50.1, which would have been unchanged from the December reading.

The non-manufacturing PMI came in with a score of 50.2, down from 52.2.

The composite index had a score of 50.1 - missing forecasts for 52.1 and down from 52.2.

China's industrial profits declined at a faster pace in 2024 despite a surge in profits in December. Industrial profits decreased 3.3 percent in 2024 compared to a drop of 2.3 percent in 2023.

The Trump administration said on Sunday night it was pausing punitive tariffs against Colombia after its leader agreed to grant entry to U.S. military flights carrying deported migrants.

Trump had threatened tariffs and sanctions on the country to punish it for earlier refusing to accept military flights as part of his sweeping immigration crackdown.

Meanwhile, Greenland Prime Minister Mute Egede has announced a desire to obtain independence from Denmark in the wake of Trump's comments about buying the island territory.

Trump repeated the threat on Saturday, claiming that the annexation by the U.S. of the resource-rich Arctic Island was necessary "for the protection of the free world."

Traders also remain cautious ahead of the monetary policy decisions from the US Fed and the European Central Bank later in the week.

Oil prices fell about 1 percent after Trump on Friday reiterated his call for OPEC to cut oil prices to hut hurt oil-rich Russia's finances and help bring an end to the war in Ukraine.

In the Asian trading today, the Australian dollar fell to a 6-day low of 1.6649 against the euro and a 5-day low of 97.71 against the yen, from Friday's closing quotes of 1.6619 and 98.41, respectively. If the aussie extends its downtrend, it is likely to find support around 1.67 against the euro and 95.00 against the yen.

Against the U.S. and the Canadian dollars, the aussie edged down to 0.6281 and 0.9037 from last week's closing quotes of 0.6309 and 0.9048, respectively. The aussie may test support near 0.61 against the greenback and 0.89 against the loonie.

The NZ dollar fell to a 5-day low of 1.8423 against the euro and a 4-day low of 88.28 against the yen, from Friday's closing quotes of 1.8377 and 89.05, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.86 against the euro and 86.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi edged down to 0.5679 and 1.1071 from last week's closing quotes of 0.5709 and 1.1049, respectively. The next possible downside target for the kiwi are seen around 0.55 against the greenback and 1.11 against the aussie.

The Canadian dollar fell to a 6-day low of 108.00 against the yen and a 4-day low of 1.4402 against the U.S. dollar, from Friday's closing quotes of 108.72 and 1.4342, respectively. If the loonie extends its downtrend, it is likely to find support around 107.00 against the yen and 1.45 against the greenback.

Against the euro, the loonie edged down to 1.5066 from last week's closing value of 1.5049. On the downside, 1.52 is seen as the next support level for the loonie. against the euro.

Looking ahead, Canada wholesale sales data for December, U.S. Chicago Fed National Activity index for December and U.S. home sales data for December, are slated for release in the New York session.

Markets in the region, including China, South Korea and Taiwan are closed on account of Lunar New Year holiday.

The Australian stock market is closed for Australia Day holiday.