Commodity Currencies Fall As Crude Oil Prices Slide

(RTTNews) - Commodity currencies such as the Australia, the New Zealand and the Canadian dollars weakened against their major rivals in the Asian session on Wednesday, as the crude oil prices drop amid concerns about the outlook for fuel demand due to economic slowdown, and rising prospects of more interest rate hikes.

Reports indicating possible excess supply in the market weighed as well on oil prices. West Texas Intermediate Crude oil futures ended lower by $1.67 or 2.4 percent at $67.70 a barrel.

Also, the Australian dollar fell further after the nation's consumer price inflation slowed more-than-expected to a 13-month low in May.

Data from Australia Bureau of Statistics showed that the Australia's consumer prices grew 5.6 percent from a year ago, slower than the 6.8 percent increase in April. This was the slowest growth since last April, when prices gained 5.5 percent. Also, the rate was weaker than economists' forecast of 6.1 percent.

In the Asian trading today, the Australian dollar fell to nearly a 2-month low of 1.6544 against the euro and nearly a 2-week low of 95.15 against the yen, from yesterday's closing quotes of 1.6389 and 96.32, respectively. If the aussie extends its downtrend, it is likely to find support around 1.67 against the euro and 93.00 against the yen.

Against the U.S., the New Zealand and the Canadian dollars, the aussie dropped to more than a 3-week low of 0.6618, nearly a 4-week low of 1.0798 and nearly an 8-month low of 0.8746 from Tuesday's closing quotes of 0.6686, 1.0842 and 0.8819, respectively. The aussie may test support around 0.64 against the greenback, 1.06 against the kiwi and 0.86 against the loonie.

The NZ dollar fell to a 2-month low of 1.7906 against the euro, from yesterday's closing value of 1.7777. The kiwi is likely to find support around the 1.81 area.

Against the U.S. dollar and the yen, the kiwi dropped to more than a 2-week low of 0.6114 and a 2-day low of 88.02 from yesterday's closing quotes of 0.6162 and 88.78, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.59 against the greenback and 85.00 against the yen.

The Canadian dollar fell to a 6-day low of 1.4470 against the euro and a 5-day low of 1.3219 against the U.S. dollar, from yesterday's closing quotes of 1.4458 and 1.3191, respectively. If the loonie extends its downtrend, it is likely to find support around 1.47 against the euro and 1.35 against the greenback.

Against the yen, the loonie edged down to 108.79 from yesterday's closing value of 109.20. On the downside, 105.00 is seen as the next support level for the loonie.

Looking ahead, Swiss ZEW economic sentiment index for June is slated for release at 4:00 am ET in the European session.

At the same time, Vice-President of the European Central Bank Luis de Guindos will chair session 3: "Monetary policy normalisation" at the ECB Forum on Central Banking in Sintra, Portugal.

At 6:30 am ET. ECB's Executive Board member Philip R. Lane will chair panel 2: "Lessons from recent experiences in macroeconomic forecasting" at ECB Forum on Central Banking in Sintra, Portugal. Also, the Bank of England's chief economist Huw Pill will deliver a speech as part of a discussion on economic forecasting - something the BoE admits it has got wrong amid the surge in inflation - at the ECB's forum in Portugal.

In the New York session, U.S. preliminary goods trade balance data and wholesale inventories data for May, U.S. MBA purchase index for June and U.S. EIA crude oil report are due to be released. Also, Swiss National Bank quarterly bulletin report is due.

At 8:30 am ET, ECB Chair of the Supervisory Board Andrea Enria will deliver introductory statement at the Hearing of the Committee on Economic and Monetary Affairs of the European Parliament in Brussels.

One hour later, the President of the European Central Bank Christine Lagarde and Federal Reserve Chair Jerome Powell will participate in a policy panel at ECB Forum on Central Banking in Sintra, Portugal.

At 11:00 am ET, the President of the European Central Bank Christine Lagarde will deliver closing remarks at ECB Forum on Central Banking in Sintra, Portugal.