The euro, the pound and commodity currencies such as the Australian, the New Zealand and the Canadian dollars weakened against their major counterparts in the Asian session on Wednesday, as investors fled risky assets and commodity prices fell amid renewed Brexit fears.
Worries about the economic and financial fallout of Britain leaving the European Union have gripped financial markets again. On Tuesday, three U.K. property funds halted redemptions, citing the need to raise cash before returning money to investors.
Crude oil for August delivery are currently down $0.25 at $46.35 a barrel amid speculation markets are oversupplied during a time of significant economic uncertainty.
Nigeria’s oil industry recovered partially from militant attacks and Iran and Gulf members are boosting supplies, leading to oversupply concerns. Meanwhile, traders await the release of API crude stockpiles report due later in the day.
Tuesday, the euro and the pound fell against their major rivals.
Among the commodity currencies, the Australian dollar showed mixed trading against its major rivals. While the Australian dollar rose against the U.S. dollar and the euro, it fell against the yen.
Meanwhile the New Zealand and the Canadian dollars fell against U.S. dollar, the yen and the euro.
In the Asian trading, the euro fell to nearly a 2-week low of 111.04 against the yen, from yesterday’s closing value of 112.65. The euro may test support near the 109.00 region.
Against the Swiss franc and the U.S. dollar, the euro dropped to an 8-day low of 1.0794 and a 6-day low of 1.1036 from yesterday’s closing quotes of 1.0819 and 1.1076, respectively. If the euro extends its downtrend, it is likely to find support around 1.06 against the franc and 1.08 against the greenback.
The pound fell to a 31-year low of 1.2791 against the U.S. dollar, from yesterday’s closing value of 1.3022. The pound may test support near the 1.26 area.
Against the Swiss franc, the yen and the euro, the pound dropped to nearly a 5-year low of 1.2511, nearly a 4-year low of 128.62 and nearly a 3-year low of 0.8626 from yesterday’s closing quotes of 1.2715, 132.42 and 0.8505, respectively. If the pound extends its downtrend, it is likely to find support around 1.24 against the franc, 127.00 against the yen and 0.87 against the euro.
The Australian dollar fell to a 9-day low of 74.55 against the yen and a 6-day low of 0.7408 against the U.S. dollar, from yesterday’s closing quotes of 75.89 and 0.7461, respectively. If the aussie extends its downtrend, it is likely to find support around 72.00 against the yen and 0.72 against the greenback.
Against the euro and the Canadian dollar, the aussie edged down to 1.4902 and 0.9659 from yesterday’s closing quotes of 1.4840 and 0.9682, respectively. The Australian dollar is likely to find support at 1.52 against the euro and 0.94 against the loonie.
The NZ dollar fell to an 8-day low of 71.25 against the yen, from yesterday’s closing value of 72.75. On the downside, 96.00 is seen as the next support level for the kiwi.
Against the U.S. dollar, the euro and the Australian dollar, the kiwi edged down to 6-day lows of 0.7079, 1.5599 and 1.0475 from yesterday’s closing quotes of 0.7153, 1.5479 and 1.0428, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.68 against the greenback, 1.59 against the euro and 1.08 against the aussie.
The Canadian dollar fell to nearly a 2-week low of 77.11 against the yen and an 8-day low of 1.3048 against the U.S. dollar, from yesterday’s closing quotes of 78.35 and 1.2978, respectively. If the loonie extends its downtrend, it is likely to find support around 75.00 against the yen and 1.32 against the greenback.
Against the euro, the loonie edged down to 1.4407 from yesterday’s closing value of 1.4374. The loonie may test support near the 1.47 region.
Meanwhile, safe haven currencies such as the U.S. dollar and the yen rose against their major counterparts.
The U.S. dollar rose to a 6-day high of 0.9784 against the Swiss franc, from yesterday’s closing value of 0.9765. The greenback is likely to find resistance around the 0.99 area.
The yen rose to nearly a 2-week high of 100.58 against the U.S. dollar, from yesterday’s closing value of 101.71. On the upside, 98.00 is seen as the next resistance level for the yen.
Looking ahead, German factory orders for May is due to be released in the pre-European session at 2:00 am ET.
Markit is slated to release Germany’s construction PMI data for June later in the day.
At 3:30 am ET, Reserve Bank of Australia Assistant Governor Guy Debelle is expected to speak about the FX Code of Conduct at a Thomson Reuters event in Sydney.
Around the same time, Bank of Spain Governor Luis Linde will deliver a speech titled “Stability premise for recovery,” organized by the College of Civil Engineering, Channels and Ports, the Roads Foundation and the Menendez Pelayo International University in Madrid.
Half-an-hour later, European Central Bank President Mario Draghi along with other ECB board members will deliver opening remarks at the 8th ECB Statistics Conference, in Frankfurt.
In the New York session, Canada and U.S. trade balance for May, final U.S. services PMI for June and U.S. ISM non-manufacturing PMI for June are slated for release.
At 8:00 am ET, Federal Reserve Bank of New York President William Dudley will meet with Binghamton University researchers and Southern Tier Regional Economic Development Council members to discuss economic development projects and tours the BU Innovate Technologies Complex in Vestal, New York.
At 9:00 am ET, Federal Reserve Governor Daniel Tarullo is expected to speak about financial regulation and monetary policy at the Wall Street Journal Breakfast Conversation in Washington DC, via satellite.
At 2:00 pm ET, U.S. Federal Reserve’s Federal Open Market Committee will publish the minutes of its June policy meeting.
The material has been provided by InstaForex Company – www.instaforex.com