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 most Asian stock markets traded lower tracking the weak cues overnight from Wall Street after crude oil futures tumbled into negative territory. Weak earnings outlook from local companies also dented investor sentiment.
Investor reaction was muted to news that U.S. index provider MSCI has decided to add Chinese A-shares into its benchmark Emerging Markets Index. MSCI will add 222 China A shares in the index starting in June 2018.
Crude oil delivery for August is currently down by 0.06 percent or $43.45 per barrel.
The crude oil prices fell amid reports that Nigeria and Libya are ramping up production. The two most vulnerable OPEC nations are exempt from the cartel’s supply quota deal with Russia. While some increases in production were expected, the pace of Libya’s output is particularly surprising.
Traders await the official report of U.S. crude oil supplies from the Energy Information Administration later in the day. Meanwhile, the American Petroleum Institute reported Tuesday that the U.S. crude supply showed a decline of 2.7 million barrels for the week ended June 16.
The NZ dollar started falling following the disappointing dairy auction results.
In the latest GlobalDairyTrade auction held in the recent session, the dairy prices fell 0.8 percent in the trade-weighted index’s first decline since March, with an average selling price of $3,434 per tonne. While prices for whole milk powder, New Zealand’s key export, dropped 3.3 percent to US$3,022 a tonne
In other economic news, data from the Westpcac Institutional Bank showed that Australia’s leading index softened in May but it continued to signal above trend growth momentum. The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell to 0.62 percent…