Antipodean currencies such as the Australian and the New Zealand dollars continued to be weak against their major counterparts in the Asian session on Wednesday amid rising risk aversion, as commodity rout extends.
The price of crude oil came to its lowest levels in over six years on Tuesday. Worries about global oversupply have recently weighed on the price of crude oil, as OPEC ended its policy meeting on Monday without announcing a reduction in production.
The Australian dollar rose after the release of Chinese inflation data for November. But, retreated in a short while.
Data from the National Bureau of Statistics showed that the consumer prices in China advanced 1.5 percent on year in November. That exceeded forecasts for an increase of 1.5 percent and was up from 1.3 percent in October. On a monthly basis, inflation was flat following the 0.3 percent decline in October.
The bureau also said that producer prices contracted an annual 5.9 percent, in line with expectations and unchanged from the previous month.
In other economic news, data from the Australian Bureau of Statistics said that the total number of owner-occupied home loans in Australia was down a seasonally adjusted 0.5 percent on month in October, standing at 55,571. That beat forecasts for a decline of 1.0 percent following the 2.0 percent increase in September.
The latest survey from Westpac Bank showed that consumer confidence in Australia slowed in December, as its index slipped 0.8 percent. That brings the index score down to 100.8, although it still remains above the 100-point level where optimists outnumber pessimists.
Meanwhile, traders speculate that the Reserve Bank of New Zealand is likely to cut its official cash rate by a quarter point to 2.5 percent with its monetary policy statement due on Thursday.
Traders were also looking ahead to next week’s Federal Reserve monetary policy meeting. The Fed is widely expected to announce an increase in interest rates following the meeting, but traders will pay close attention to the wording of the statement.
Tuesday, the Australian and the New Zealand dollars fell against their major rivals, due to sliding oil prices and on weak Chinese exports data. The Australian dollar fell 0.72 percent against the U.S. dollar, 1.09 percent against the yen and 1.40 percent against the euro. The NZ dollar fell 0.24 percent against the U.S. dollar, 0.36 percent against the yen and 0.64 percent against the euro.
In the Asian trading, the Australian dollar fell to 0.7208 against the U.S. dollar, 88.51 against the yen and 1.5135 against the euro, from early highs of 0.7237, 88.99 and 1.5047, respectively. If the aussie extends its downtrend, it is likely to find support around 0.71 against the greenback, 87.00 against the yen and 1.56 against the euro.
Against the Canadian dollar, the aussie dropped to 0.9791 from an early 2-day high of 0.9824. The aussie may test support near the 0.96 region.
The NZ dollar fell to a 6-day low of 1.6473 against the euro, from yesterday’s closing value of 1.6371. On the downside, 1.66 is seen as the next support level for the kiwi.
Against the yen, the kiwi dropped to 81.30 from yesterday’s closing value of 81.64. The kiwi is likely to find support around the 80.00 area.
Against the Australian and the U.S. dollars, the kiwi edged down to 1.0899 and 0.6622 from an early near 4-week high of 1.0839 and a 2-day high of 0.6659, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.10 against the aussie and 0.65 against the greenback.
Looking ahead, the preliminary Japan machine tool orders for November is due to be released at 1:00 am ET. Subsequently, Swiss unemployment rate for November and German trade balance for October are slated for release in the pre-European session at 1:45 am ET and 2:00 am ET, respectively.
The Bank Of England’s financial policy committee record of November meeting is set to be published later in the day.
At 5:00 am ET, European Central Bank Executive Board member and Austrian central bank governor Ewald Nowotny is expected to speak on Austria’s economy growing in 2016 and 2017, in Vienna.
In the New York session, U.S. wholesale trade sales data for October and U.S. weekly crude oil inventories data for the week ended December 4 are set to be announced.
Later, European Central Bank Executive Board member Sabine Lautenschlaeger is expected to speak at the 11th High-Level Meeting for Middle East and North Africa Region, in Abudhabi, United Arab Emirates.
The material has been provided by InstaForex Company – www.instaforex.com