Commodity currencies such as the Australian, the New Zealand and the Canadian dollars weakened against their major counterparts in the Asian session on Wednesday after data showed that activity in China’s factory sector fell to a six-and-a-half year low in September.
Data from Caixin showed that the manufacturing sector in China continued to contract in September and at a faster rate, with a 78-month low PMI score of 47.0. That was shy of forecasts for 47.5 and down from 47.3 in August, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. In all, the manufacturing PMI has contracted for seven straight months.
Meanwhile, Asian stock markets traded lower, tracking the weak cues from Wall Street overnight and the European markets amid lower commodity prices and on concerns over German auto giant Volkswagen’s diesel-emissions scandal.
Crude oil for November delivery are currently down $0.15 to $46.21 a barrel.
Crude oil prices fell on demand growth concerns and a firmer dollar ahead of the weekly crude inventory data.
Tuesday, the Australian, the New Zealand and the Canadian dollars fell against the U.S. dollar and the yen. Against the euro, the aussie and the loonie rose, but the kiwi held steady.
In the Asian trading, the Australian dollar fell to near 2-week lows of 0.7024 against the U.S. dollar, 84.18 against the yen and 0.9337 against the Canadian dollar, from yesterday’s closing quotes of 0.7089, 85.15 and 0.9406, respectively. If the aussie extends its downtrend, it is likely to find support around 0.69 against the greenback, 82.00 against the yen and 0.92 against the loonie.
Against the euro and the NZ dollar, the aussie dropped to 5-day lows of 1.5833 and 1.1219 from yesterday’s closing quotes of 1.5683 and 1.1258, respectively. The aussie may test support near 1.62 against the euro and 1.09 against the kiwi.
The NZ dollar fell to more than a 2-week low of 74.89 against the yen and nearly a 2-week low of 0.6257 against the U.S. dollar, from yesterday’s closing quotes of 75.56 and 0.6288, respectively. If the kiwi extends its downtrend, it is likely to find support around 72.00 against the yen and 0.61 against the greenback.
Against the euro, the kiwi dropped to a 2-day low of 1.7789 from yesterday’s closing value of 1.7665. The kiwi may test support near the 1.80 region.
The Canadian dollar fell to more than a 2-week low of 90.04 against the yen, from yesterday’s closing value of 90.51. The loonie may test support near the 87.00 region.
Against the U.S. dollar and the euro, the loonie dropped to 1.3294 and 1.4797 from yesterday’s closing quotes of 1.3271 and 1.4751, respectively. If the loonie extends its downtrend, it is likely to find support around 1.33 against the greenback and 1.54 against the euro.
Meanwhile, the safe haven yen rose against its major rivals amid risk aversion.
The yen rose to more than 2-week highs of 133.19 against the euro and 183.69 against the pound, from yesterday’s closing quotes of 133.57 and 184.55, respectively. If the yen extends its uptrend, it is likely to find resistance around 132.00 against the euro and 180.00 against the pound.
Against the Swiss franc and the U.S. dollar, the yen advanced to a 2-week high of 122.76 and a 5-day high of 119.66 from yesterday’s closing quotes of 123.15 and 120.11, respectively. The yen may test resistance near 121.00 against the franc and 115.00 against the greenback.
Looking ahead, flash manufacturing and service sector PMI reports for September from major European economies are due to be released later in the day.
In the New York session, Canada retail sales data for July, flash U.S. manufacturing PMI for September is slated for release.
At 9:00 am ET, European Central Bank Chief Mario Draghi will testify on monetary policy before the European Parliament’s Economic and Monetary Committee in Brussels.
Around the same time, the Bank of England holds financial policy committee meeting in London.
At 12:00 pm ET, Bank of England Deputy Governor Ben Broadbent gives speech on the labour market in London.
Federal Reserve Bank of Atlanta President Dennis Lockhart is scheduled to speak before the Columbus Rotary Club at 12:30 pm ET.
All Japanese banks and financial markets will be closed in observance of Autumnal Equinox Day holiday.
The material has been provided by InstaForex Company – www.instaforex.com