Forex News

Commodity currencies weakened against risk aversion after dismal China trade data

Commodity currencies, such as Australian, New Zealand and Canadian dollars, dropped against their main opponents in the Asian session on Monday, as China’s exports and imports unexpectedly declined in December, heightening concerns that Beijing’s trade dispute with Washington began to affect the second largest economy.

China's exports unexpectedly fell by 4.4 percent on an annualized basis in December, which is the largest monthly decline in two years, while imports also sank by 7.6 percent, noting the most pain The second decline since July 2016.

Asian stocks generally fell due to fears of a sharp economic downturn in the world's second largest economy.

Investors also expected a profit report from US banks this week and a key vote in The British Parliament on the EU withdrawal deal on Tuesday.

Oil prices fell by more than 1 percent, as weak data from China indicate a slowdown in the world's largest trading country.

The Australian dollar fell to 4-day lows 0.7180 against up to USA Lara and 77.59 against the yen from early highs 0.7218 and 78.26, respectively. The Australian dollar is likely to test support around 0.70 against the US dollar and 76.00 against the yen if it continues to fall.

Rising to the 4-week high of 1.5879 against the euro at 17:00 Eastern time , the Aussie changed direction and fell to 1.5983. A continuation of the downward trend of the Australian can lead to support around 1.62.

The Australian dollar fell to 0.9536 against the Canadian and 1.0546 against the Kiwi compared to previous highs of 0.9568 and 1.0566, respectively. The Aussie is likely to test support at around 0.94 against the Canadian and 1.04 against the Kiwi.

The Kiwi fell to 0.6800 against the US dollar and 73.47 against the yen, turning around from early highs of 0.6832 and 74 , 13 respectively. The next key support for the kiwi is likely to be 0.67 against the US dollar and 72.00 against the yen.

After rising to 1.6771 against the euro at 5:00 pm ET, the kiwi changed course and reached 1.6879. Kiwi is ready to find support around 1.70.

The Canadian dollar fell to a 6-day low of 1.3229 against the US dollar and a weekly minimum of 81.33 against the yen, compared with the highs of 1.3254 and 81.86, respectively. achieved at the beginning of the session. On the other hand, 1.34 and 78.5 are probably regarded as the next support levels for the Canadian dollar versus the yen, respectively.

The Canadian dollar fell to 1.5249 against the euro after rising to 1.5194 at 17:00 Eastern time . The next possible support for loonie is seen around level 1.54.

The Japanese yen strengthened to weekly highs of 123.96 against the euro, 109.88 against the franc and 81.33 against the Canadian dollar, starting from early lows of 124.43, 110.31 and 81.86, respectively. The yen is likely to meet resistance around 122.00 against the euro, 107.00 against the franc and 80.00 against the Canadian. P>

The yen rose to a 4-day high of 108.04 against the US dollar from a low of 108.55, reached at 5:00 pm ET. The yen, as you can see, finds resistance around 106.00. R>

The Japanese currency reversed from an early 2-week low of 139.57 against the pound, rising to 138.75. If the yen continues to grow, the next resistance level will be 136.00. P>

Looking ahead, the report on industrial production in the euro area for November will be published in the European session. p>