Commodity currencies such as the Australian, the New Zealand and the Canadian dollars weakened against their major counterparts in the Asian session on Thursday, as worries about global economic slowdown and the persistent weakness in crude oil prices increased risk aversion.
The Australian dollar trimmed some of its losses the release of nation’s unemployment data, but reversed course shortly after.
Data from the Australian Bureau of Statistics showed that the unemployment rate in Australia came in at a seasonally adjusted 5.8 percent in December. That was unchanged from the November reading, and it beat forecasts for 5.9 percent.
The Australian economy lost 1,000 jobs in December, which also topped forecasts for a decline of 10,000 jobs following the addition of 71,400 jobs in the previous month.
Wednesday, the Australian, New Zealand and Canadian dollars rose against their major rivals, as sentiment improved following the release of better than expected Chinese trade data for December and the stabilization of the yuan.
The Australian dollar rose 0.39 percent against the U.S. dollar, 0.74 percent against the yen and 0.57 percent against the euro. The NZ dollar rose 0.33 percent against the U.S. dollar, 0.63 percent against the yen and 0.60 percent against the euro. The Canadian dollar rose 0.27 percent against the yen and 0.74 percent against the euro.
Meanwhile, the Canadian dollar fell against the U.S. dollar.
In the Asian trading, the Australian dollar fell to more than a 4-month low of 0.6920 against the U.S. dollar and a 2-day low of 0.9938 against the Canadian dollar, from yesterday’s closing quotes of 0.6955 and 0.9970, respectively. If the aussie extends its downtrend, it is likely to find support around 0.68 against the greenback and 0.97 against the loonie.
Against the euro and the yen, the aussie dropped to 3-day lows of 1.5739 and 81.22 from yesterday’s closing quotes of 1.5632 and 81.83, respectively. The aussie may test support around 1.59 against the euro and 80.00 against the yen.
The NZ dollar fell to nearly a 4-month low of 75.89 against the yen, nearly a 3-month low of 1.6841 against the euro and nearly a 2-month low of 0.6466 against the U.S. dollar, from yesterday’s closing quotes of 76.61, 1.6692 and 0.6511, respectively. If the kiwi extends its downtrend, it is likely to find support around 74.00 against the yen, 1.73 against the euro and 0.63 against the greenback.
Against the Australian dollar, the kiwi dropped to an 8-day low of 1.0724 from yesterday’s closing value of 1.0670. The kiwi is likely to find support around the 1.08 area.
The Canadian dollar fell to a 12-year low of 1.4382 against the U.S. dollar, from yesterday’s closing value of 1.4340. On the downside, 1.44 is seen as the next support level for the loonie.
Against the euro and the yen, the loonie dropped to a 6-year low of 1.5667 and a 3-year low of 81.57 from yesterday’s closing quotes of 1.5023 and 82.04, respectively. If the loonie extends its downtrend, it is likely to find support around 1.70 against the euro and 80.00 against the yen.
Looking ahead, the German WPI for December is due to be released in the pre-European session at 2:00 am ET.
At 6:00 am ET, Bank of England Deputy Governor for Prudential Regulation and Chief Executive of the Prudential Regulation Authority (PRA) Andrew Bailey will be a panelist at the City of London Corporation ‘2016 – The Year of Green Finance’ launch in London.
The Bank of England will announce its interest rate decision at 7:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.50 percent and asset purchase target at GBP 375 billion.
At 7:30 am ET, the European Central Bank will publish the minutes of December policy meeting.
In the New York session, U.S. import price index for December, U.S. weekly jobless claims for the week ended January 9 and Canada new housing price index for November are slated for release.
At 8:30 am ET, Federal Reserve Bank of St. Louis President James Bullard is scheduled to give a presentation on the U.S. Economy and Monetary Policy before the Economic Club of Memphis at the 2016 Regional Economic Briefing and Breakfast in Memphis.
Shortly after, Federal Reserve Bank of Atlanta President Dennis Lockhart is set to deliver the welcome remarks before the 2016 Operation Hope Global Forum Annual Meeting in Atlanta.
The material has been provided by InstaForex Company – www.instaforex.com