Commodity Currency's Slide Amid Risk-off Mood

(RTTNews) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Tuesday, as Asian shares traded lower amid ongoing concerns about the market valuation, especially among technology shares, and the diminishing prospects of an interest rate cut by the U.S. Fed next month.

With U.S. government agencies back to business, markets are anticipating many pending and upcoming economic releases to get a glimpse on the state of economy and for clues on which way the Fed will decide on interest rates.

CME Group's FedWatch Tool is currently indicating only a 55.1 percent chance the Fed will leave rates unchanged next month and a 44.9 percent chance of another quarter point rate cut.

Crude oil prices edged lower as long-term oversupply concerns of a supply-demand mismatch continue to linger. West Texas Intermediate crude for December delivery dipped $0.09 or 0.13 percent at $60.01 per barrel.

The Australian dollar started trading lower against its major rivals after the release of Reserve Bank of Australia's (RBA) November meeting minutes.

The RBA minutes revealed that, in the face of sticky inflation and indications of labor market resiliency, officials were becoming more wary of potential interest rate reductions.

The RBA Board members felt that the country's economic growth was expected to slow in the second half of 2025, minutes from the central bank's November 4 monetary policy meeting revealed.

At the meeting, the RBA held its cash rate at 3.60 percent, as widely expected. The bank had reduced the rate by 25 basis points each in August, May and February. The current 3.60 percent is the lowest since March 2023 as board members observed that some inflationary pressure may remain in the economy.

In the Asian trading today, the Australian dollar fell to nearly a 1-month low of 0.9104 against the Canadian dollar, from yesterday's closing value of 0.9128. The next possible downside target for the aussie is seen around the 0.90 region.

Against the U.S. dollar and the euro, the aussie slipped to near 2-week lows of 0.6477 and 1.7898 from Monday's closing quotes of 0.6494 and 1.7850, respectively. If the aussie extends its downtrend, it is likely to find support around 0.63 against the greenback and 1.81 against the euro.

Against the yen and the NZ dollar, the aussie slid to 4-day lows of 100.50 and 1.1462 from yesterday's closing quotes of 100.83 and 1.1479, respectively. On the downside, 98.00 against the yen and 1.13 against the kiwi are seen as the next support levels for the aussie. The NZ dollar fell to a 5-day low of 0.5639 against the U.S. dollar, from yesterday's closing value of 0.5658. The kiwi may test support near the 0.55 region.

Against the yen and the euro, the kiwi slid to 4-day lows of 87.35 and 2.0563 from Monday's closing quotes of 87.84 and 2.0489, respectively. If the kiwi extends its downtrend, it is likely to find support around 86.00 against the yen and 2.06 against the euro. The Canadian dollar fell to nearly a 2-week low of 1.4063 against the U.S. dollar and a 4-day low of 1.6311 against the euro, from yesterday's closing quotes of 1.4055 and 1.6292, respectively. If the loonie extends its downtrend, it is likely to find support around 1.41 against the greenback and 1.64 against the euro.

Against the yen, the loonie edged down to 110.14 from Monday's closing value of 110.46. The loonie is likely to find support around the 108.00 region.

Looking ahead, Canada housing starts for October, U.S. ADP weekly employment data, U.S. New York Fed services activity index for November, U.S. Redbook, U.S. factory orders for August and U.S. NAHB housing market index are slated for release in the New York session.