Commodity Currency's Slide Amid Risk Aversion

(RTTNews) - The Commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major currencies in the Asian session on Friday amid risk aversion, as investors reacted to U.S. President Donald Trump's confirmation that tariffs on Mexico and Canada would proceed next week, along with an additional 10 percent tariff in China.

Trump clarified that previously paused 25 percent tariffs on imports from Mexico and Canada will go into effect on March 4. He said an additional 10 percent tariff on imports from China will also be imposed on that date, on top of the 10% tariff also introduced earlier this month.

He claimed drugs are pouring into the U.S. from Mexico and Canada and that a large percentage of these drugs are supplied by China.

The president also said in a Truth Social post that the April 2 date for reciprocal tariffs on other U.S. trade partners will "remain in full force and effect."

In economic news, Total credit in Australia was up 0.5 percent on month and 6.5 percent on year in January, the Reserve Bank of Australia said on Friday. Housing credit was up 0.4 percent on month and 5.6 percent on year, while personal credit was flat on month and up 2.2 percent on year and business credit climbed 0.7 percent on month and 8.8 percent on year. Broad money was up 0.3 percent on month and 5.2 percent on year.

In the Asian trading today, the Australian dollar fell to nearly a 7-month low of 92.73 against the yen and a 2-week low of 0.8974 against the Canadian dollar, from yesterday's closing quotes of 93.53 and 0.9002, respectively. If the aussie extends its downtrend, it is likely to find support around 89.00 against the yen and 0.88 against the loonie.

Against the U.S. dollar and the euro, the aussie dropped to near 4-week lows of 0.6211 and 1.6719 from Thursday's closing quotes of 0.6232 and 1.6679, respectively. The aussie may test support near 0.60 against the greenback and 1.69 against the euro.

The NZ dollar fell to more than a 2-week low of 0.5602 against the U.S. dollar, nearly a 7-month low of 83.67 against the yen and a 2-month low of 1.8538 against the euro, from yesterday's closing quotes of 0.5626, 84.44 and 1.8475, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.54 against the greenback, 82.00 against the yen and 1.86 against the euro.

Against the Australian dollar, the kiwi edged down to 1.1090 from Thursday's closing value of 1.1077. The kiwi is likely to find support near the 1.12 region.

The Canadian dollar fell to nearly a 4-week low of 1.4453 against the U.S. dollar, from yesterday's closing value of 1.4447. If the loonie extends its downtrend, it is likely to find support around the 1.48 area.

Against the yen, the loonie dropped to a 5-1/2-month low of 103.21 from Thursday's closing value of 103.90. On the downside, 102.00 is seen as the next support level for the loonie.

Looking ahead, German retail sales data and import prices data for January and U.K. Nationwide housing prices for February are due to be released in the pre-European session at 2:00 am ET.

In the European session, German unemployment rate for February and ECB consumer inflation expectations for January are slated for release.

In the New York session, Canada GDP data for December and the fourth quarter, U.S. Core PCE price index for January, U.S. personal income and spending data for January, U.S. Chicago PMI for February and U.S. Baker Hughes oil rig count data are set to be published.