Commodity Currencies Drop As Asian Stock Markets Fall On Geopolitical Tensions

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 Asian stock markets traded lower amid worries about rising tensions between the U.S. and North Korea after President Donald Trump warned that further threats from North Korea would be met with fire and fury.

In response, North Korea said it was carefully examining a plan to strike the U.S.-held Pacific island of Guam with missiles.

Meanwhile, the crude oil delivery for September is currently down 0.14 percent or $ 49.03 per barrel. The crude oil price fell as OPEC gathered to discuss its supply quota plan. Analysts say the cartel may announce deeper production cuts in order to sustain above $50 a barrel.

Saudi Arabia will cut crude oil allocations to its customers worldwide in September by at least 520,000 barrels per day, Reuters reported.

In other economic news, data from Westpac showed that Australia consumer confidence deteriorated further in August. The Westpac Melbourne Institute Index of Consumer Sentiment dropped to 95.5 in August from 96.6 in July.

Data from the Australian Bureau of Statistics showed that the total number of home loans issued in Australia was up a seasonally adjusted 0.5 percent in June, coming in at 54,404. That missed forecasts for a gain of 1.5 percent following the 1.0 percent gain in May.

Data from the National Bureau of Statistics showed that the consumer prices in China were up 1.4 percent on year in July. That was shy of expectations for 1.5 percent, which would have been unchanged from the June reading.

On a monthly basis, inflation added 0.1 percent after slipping 0.2 percent in the previous month.

The bureau also said that producer prices advanced an annual 5.5 percent, missing forecasts of 5.6 percent which also would have been unchanged.

In the Asian trading, the Australian dollar fell to a 5-day low of 1.4938 against the euro and nearly a 5-week low of 86.29 against the yen, from yesterday’s closing of 1.4851 and 87.30, respectively. If the aussie extends its downtrend, it may find support around 1.51 against the euro and 85.00 against the yen.

Against the U.S. and the Canadian dollars, the aussie dropped to more than a 3-week low of 0.7855 and a 6-day low of 0.9972 from yesterday’s closing quotes of 0.7911 and 1.0021, respectively. The aussie may test support near 0.77 against the greenback and 0.98 against the loonie.

The aussie edged down to 1.0746…

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