Commodity currencies such as the Australian, the New Zealand and the Canadian dollars weakened against their major counterparts in the Asian session on Friday as crude oil futures slipped in early Asian trades. Worries about the outlook for the global economy are also weighing on investor sentiment.
Crude oil for April delivery are currently down $0.33 at $32.60 a barrel. Crude oil prices dropped following the release of the official inventory data, which showed that crude oil stockpiles increased by 2.1 million barrels to a record high of 504.1 million barrels, marking the fifth weekly rise in six.
The Australian dollar began weakening after comments by Reserve Bank of Australia board member John Edwards.
While Speaking in an interview, John Edwards said the the Australian dollar was too strong. "The Aussie has found a base, and I guess I would say I still think it is a bit too high," he said.
Thursday, the Australian and the Canadian dollars showed mixed trading against its major rivals. While the aussie and the loonie rose against the euro, they held steady against the yen. Against the U.S. dollar, the aussie and the loonie held steady. The NZ dollar rose 0.28 percent against the U.S. dollar, 0.13 percent against the yen and 0.26 percent against the euro.
In the Asian trading, the Australian dollar fell to a 1-week low of 79.99 against the yen and a 3-day low of 1.0729 against the NZ dollar, from yesterday's closing quotes of 81.03 and 1.0768, respectively. If the aussie extends its downtrend, it is likely to find support around 77.00 against the yen and 1.05 against the kiwi.
Against the U.S. dollar and the euro, the aussie dropped to 2-day lows of 0.7096 and 1.5681 from yesterday's closing quotes of 0.7156 and 1.5515, respectively. The aussie may test support near 0.69 against the greenback and 1.62 against the euro.
The aussie edged down to 0.9773 against the Canadian dollar, from yesterday's closing value of 0.9821. On the downside, 0.96 is seen as the next support level for the aussie.
The NZ dollar fell to a 2-day low of 74.54 against the yen, from yesterday's closing value of 75.20. The kiwi may test support near the 73.00 region.
Against the euro, the kiwi dropped to a 2-day low of 1.6826 from an early 2-week high of 1.6696. If the kiwi extends its downtrend, it is likely to find support around the 1.72 area.
The kiwi edged down to 0.6612 against the U.S. dollar, from yesterday's closing value of 0.6640. On the downside, 0.64 is seen as the next support level for the kiwi
The Canadian dollar fell to 2-day lows of 1.3783 against the U.S. dollar and 81.78 against the yen, from yesterday's closing quotes of 1.3724 and 82.48, respectively. If the loonie extends its downtrend, it is likely to find support around 1.41 against the greenback and 80.00 against the yen.
Against the euro, the loonie dropped to a 2-day low of 1.5334 from yesterday's closing value of 1.5241. The loonie is likely to find support around the 1.58 area.
Meanwhile, the safe-haven yen rose against its major rivals amid rising risk aversion.
The yen rose to more than a 2-1/2-year high of 125.38 against the euro and nearly a 1-1/2-year high of 113.67 against the Swiss franc, from yesterday's closing quotes of 125.75 and 113.96, respectively. If the yen extends its uptrend, it is likely to find resistance around 119.00 against the euro and 112.00 against the franc.
Against the pound and the U.S. dollar, the yen advanced to an 8-day high of 161.33 and a 1-week high of 112.71 from yesterday's closing quotes of 162.23 and 113.22, respectively. The yen is likely to find resistance around 159.00 against the pound and 110.00 against the greenback.
Looking ahead, the German PPI for January is due to be released in the pre-European session at 2:00 am ET.
U.K. retail sales data and public sector finance data, both for January, are slated for release.
In the New York session, U.S. and Canada CPI for January, Canada retail sales data for December, Eurozone consumer confidence index for February and U.S. Baker Hughes rig count data are set to be published.
At 8:30 am ET, European Central Bank Vice-President Vitor Constancio will participate in the EACCNY Economic Update organized by the European-American Chamber of Commerce in New York.
Subsequently, Federal Reserve Bank of Cleveland President Loretta Mester is expected to speak about the economic outlook at the Global Interdependence Center's Central Banking Series in Sarasota at 8:40 am ET.
The material has been provided by InstaForex Company - www.instaforex.com