2023.10.1907:08:00UTC+00Commodity Currencies Slide Amid Risk Aversion

Commodity currencies such as the Australia, the New Zealand and the Canadian dollars weakened against their major counterparts in the Asian session on Thursday, as Asian shares traded lower, amid rising bond yields to multi-year highs, concerns about the outlook for interest rates and escalating tensions in the Middle East.

Weakness across most sectors led by iron ore miners and energy stocks, also turned down the commodity currencies.

The Australian dollar fell further after the release of jobs data.

Data from the Australian Bureau of Statistics showed that the jobless rate in Australia came in at a seasonally adjusted 3.6 percent in September. That beat forecasts for 3.7 percent, which would have been unchanged from the August reading.

The Australian economy added 6,700 jobs last month, shy of expectations for an increase of 18,000 following the addition of 64,900 jobs in the previous month. The participation rate was 66.7 percent, below forecasts for 67.0 percent, which would have been unchanged.

In the Asian trading now, the Australian dollar fell to more than a 5-week low of 1.6736 against the euro and a 2-day low of 0.8643 against the Canadian dollar, from yesterday's closing quotes of 1.6625 and 0.8690, respectively. The aussie may test support near 1.70 against the euro and 0.85 against the loonie.

Against the U.S. dollar and the yen, the aussie slipped to 3-day lows of 0.6296 and 94.33 from Wednesday's closing quotes of 0.6336 and 94.99, respectively. If the aussie extends its downtrend, it is likely to find support around 0.61 against the greenback and 92.00 against the yen.

The aussie edged down to 1.0794 against the NZ dollar, from yesterday's closing value of 1.0820. On the downside, 1.06 is seen as the next support level for the aussie.

The NZ dollar fell to nearly a 1-year low of 0.5826 against the U.S. dollar, from yesterday's closing value of 0.5855. The kiwi is likely to find support around the 0.56 region.

Against the euro and the yen, the kiwi dropped to a 1-month low of 1.8079 and more than a 2-week low of 87.25 from Wednesday's closing quotes of 1.7990 and 87.78, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.84 against the euro and 85.00 against the yen.

The Canadian dollar fell to nearly a 2-week low of 1.4470 against the euro, from yesterday's closing value of 1.4449. On the downside, 1.47 is seen as the next support level for the loonie.

Against the U.S. dollar and the yen, the loonie dropped to near 2-week lows of 1.3736 and 109.06 from Wednesday's closing quotes of 1.3715 and 109.30, respectively. The next possible downside target level for the loonie is seen around 1.39 against the greenback and 107.00 against the yen.

Looking ahead, Eurozone current account data for August is due to be released at 4:00 am ET.

In the New York session, Canada PPI for September, raw material prices for September, U.S. weekly jobless claims and existing home sales for September are slated for release.

At 1:20 pm ET, Federal Reserve Bank of Chicago President Austan Goolsbee participates in a moderated question-and-answer session at a Wisconsin Manufacturers & Commerce Business Day event, in Madison, Wisconsin, U.S.