Commodity Currencies Fall As Crude Oil Prices Drop

(RTTNews) - The commodity-linked currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the European session on Thursday, as the crude oil prices dropped giving up earlier gains on hopes that U.S.-Iran peace negotiations could resume.

Brent crude futures for August delivery were down 0.8 percent at $92.32 a barrel, reversing gains from earlier in the session after the U.S. military said that it had 'completed' its latest round of airstrikes targeting Iran. WTI crude futures fell half a percent to $89.54.

After launching a wave of new strikes on multiple targets in Iran, U.S. President Donald Trump said that the Iranians were delaying a deal and that there would be more attacks if no peace deal is secured.

Iran has vowed to retaliate and accused the U.S. of 'war crimes', citing damage to civilian infrastructure.

Tehran also announced it would keep the Strait of Hormuz, a critical global energy shipping route, "completely closed to all type of vessels."

Iran's Islamic Revolutionary Guard Corps said early today they had launched counterattacks on 18 U.S.-military targets at airbases in Kuwait and Bahrain.

Beyond Middle East tensions, traders are increasingly wary of the potential impact of interest-rate hikes on economic growth and fuel demand.

As energy prices take center stage, the European Central Bank (ECB) is set to raise interest rates for the first time since 2023 when it meets later today.

Across the Atlantic, the U.S. Federal Reserve is likely to keep rates on hold at the June 16-17 meeting, but traders see a greater likelihood of a hike as early as October.

In the European trading today, the Australian dollar fell to near 2-month lows of 0.6990 against the U.S. dollar and 1.6503 against the euro, from early highs of 0.7012 and 1.6473, respectively. If the aussie extends its downtrend, it is likely to find support around 0.68 against the greenback and 1.68 against the euro.

Against the yen and the Canadian dollar, the aussie slid to more than a 1-month low of 112.21 and nearly a 1-month low of 0.9748 from early highs of 112.54 and 0.9782, respectively. The aussie may test support near 111.00 against the yen and 0.96 against the loonie.

The NZ dollar fell to nearly a 1-1/2-month low of 1.9952 against the euro, from an early high of 1.9894. The kiwi is likely to find support around the 2.00 region.

Against the U.S. dollar and the yen, the kiwi slid to 3-day lows of 0.5780 and 92.79 from early highs of 0.5807 and 93.19, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.56 against the greenback and 91.00 against the yen.

The kiwi edged down to 1.2100 against the Australian dollar, from an early high of 1.2068. On the downside, 1.22 is seen as the next support level for the kiwi.

The Canadian dollar fell to a 6-month low of 1.3981 against the U.S. dollar and a 2-day low of 1.6125 against the euro, from early highs of 1.3932 and 1.6087, respectively. If the loonie extends its downtrend, it is likely to find support around 1.40 against the greenback and 1.63 against the euro.

Against the yen, the loonie edged down to 114.85 from an early high of 115.21. The loonie is likely to find support around the 113.00 region.

Looking ahead, U.S. Canada building permits for April, Germany current account for April, U.S. PPI for May, U.S. weekly jobless claims data and U.S. WASDE report are slated for release in the New York session.

At 8:15 am ET, the European Central Bank will announce its monetary policy decision. The central bank is widely expected to raise interest rates by 25 basis points, taking the deposit facility rate to 2.25% from 2%.

Half-an-hour later, the ECB President Christine Lagarde will hold a press conference shortly after the announcement.