Commodity currencies such as the Australian, New Zealand and Canadian dollars weakened against their major counterparts in the Asian session on Tuesday amid risk aversion following the lackluster cues from Wall Street overnight and weak Chinese industrial profit data. Commodity prices weakened, also weighing down on these currencies.
Data from the National Bureau of Statistics showed that China’s industrial profits dropped marginally in September from a year ago. Industrial profits edged down 0.1 percent year-over-year in September, much slower than the 8.8 percent sharp decrease in August.
During the first nine months of the year, total industrial profits fell 1.7 from the corresponding period of the previous year.
Investors preferred to stay on the sidelines ahead of the outcome of the U.S. Federal Reserve’s two-day meeting on Wednesday. The Fed is widely expected to leave interest rates unchanged, but investors will be keeping a close eye on the accompanying statement.
Crude oil prices extended its loss, as U.S. inventory data is expected to show another increase in crude stocks, and global demand remains lackluster. Crude oil for December delivery are currently down $0.49 to $43.49 a barrel.
Meanwhile, the NZ dollar dropped against its major rivals after the release of nation’s trade data.
Data from Statistics New Zealand showed that New Zealand had a merchandise trade deficit of NZ$1.222 billion in September. That was wider than the NZ$825 million deficit expected by economists and followed the NZ$1.035 billion deficit in August.
Monday, the New Zealand and the Canadian dollars held steady against their major rivals. Meanwhile, the Australian dollar rose against the euro and held steady against the U.S. dollar and the yen.
In the Asian trading, the Australian dollar fell to 4-day lows of 87.09 against the yen and 1.5308 against the euro, from yesterday’s closing quotes of 87.74 and 1.5248, respectively. If the aussie extends its downtrend, it is likely to find support around 84.00 against the yen and 1.59 against the euro.
Against the U.S. and the Canadian dollars, the aussie dropped to 0.7228 and 0.9520 from yesterday’s closing quotes of 0.7245 and 0.9531, respectively. The aussie may test support near 0.70 against the greenback and 0.93 against the loonie.
The aussie edged down to 1.0671 against the NZ dollar, from an early high of 1.0705. This can be compared to an early 4-day low of 1.0664. On the downside, 1.05 is seen as the next support level for the aussie.
The NZ dollar fell to 4-day lows of 81.58 against the yen and 1.6361 against the euro, from yesterday’s closing quotes of 82.18 and 1.6277, respectively. If the kiwi extends its downtrend, it is likely to find support around 79.00 against the yen and 1.71 against the euro.
Against the U.S. dollar, the kiwi dropped to 0.6738 from yesterday’s closing value of 0.6785. The kiwi may test support near the 0.65 area.
The Canadian dollar fell to a 5-day low of 91.47 against the yen and a 4-day low of 1.4577 against the euro, from yesterday’s closing quotes of 92.05 and 1.4541, respectively. If the loonie extends its downtrend, it is likely to find support around 89.00 against the yen and 1.52 against the euro.
Against the U.S. dollar, the loonie edged down to 1.3176 from yesterday’s closing value of 1.3152. The loonie is likely to find support around the 1.34 area.
Meanwhile, the safe haven yen rose against its major rivals amid risk aversion.
In other economic news, the Bank of Japan reported that Japan’s corporate good services price index rose 0.6 percent in September, as expected.
The yen rose to nearly a 4-week high of 122.75 against the yen and a 4-day high of 120.48 against the U.S. dollar from yesterday’s closing quotes of 122.08 and 121.08, respectively. If the yen extends its uptrend, it is likely to find resistance around 121.00 against the franc and 118.00 against the greenback.
Against the pound, the yen advanced to a 5-day high of 184.99 from yesterday’s closing value of 185.82. The yen may tests resistance near the 182.00 region.
The yen climbed to 133.31 against the euro, from yesterday’s closing value of 133.88. On the upside, 132.00 is seen as the next resistance level for the yen.
Looking ahead, Swiss UBS consumption indicator for September, Eurozone M3 money supply data for September, the first estimate of U.K. GDP data for the third quarter and U.K. index of services for August are due later in the day.
In the New York session, U.S. durable goods orders for September, S&P/Case-Shiller U.S. home price index for August and Markit’s preliminary U.S service sector PMI report, U.S. consumer confidence index and U.S. Richmond manufacturing index, all for October, are slated for release.
At 1:00 pm ET, Bank of Canada Deputy Governor Tim Lane will give a speech in Halifax on the topic “Inflation Targeting – A Matter of Time.”
The material has been provided by InstaForex Company – www.instaforex.com