CANBERA (dpa-AFX) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars weakened against their major counterparts in the Asian session on Friday, as traders are cautious and optimistic that the U.S. will sign up more deals with its remaining trading partners before President Donald Trump's Aug. 1 deadline. The UK, China, Vietnam, and Indonesia have already struck deals, while Canada, India, South Korea, and the EU are ramping up their efforts.
Trader caution remains heightened by persistent uncertainty regarding the Federal Reserve's rate-cutting path and growing concerns regarding its independence in the face of growing political interference.
The market was given a geopolitical undertone by the increase of border tensions between Thailand and Cambodia, also mitigated the downturn of the commodity-linked currencies.
U.S. Secretary of the Treasury Scott Bessent reportedly said that the talks were 'going better than they had been,' and that progress was being made.
U.S. President Donald Trump has now reworded his threat stating that imports into the U.S. could face tariffs ranging from 15 to 50 per cent for countries that fail to sign a suitable deal past the August 1 deadline.
There is a 75 percent possibility that the Reserve Bank of New Zealand (RBNZ) will decrease interest rates by 25 basis points in August, according to market pricing.
In the Asian trading today, the Australian dollar fell to 2-day lows of 0.6567 against the U.S. dollar and 1.7872 against the euro, from yesterday's closing quotes of 0.6595 and 1.7825, respectively. If the aussie extends its downtrend, it is likely to find support around 0.64 against the greenback and 1.81 against the euro.
The aussie dropped to 96.62 against yen, from an early 9-day high of 97.14. On the downside, 94.00 is seen as the next support level for the aussie.
Against the Canada and the New Zealand dollars, the aussie edged down to 0.8973 and 1.0912 from Thursday's closing quotes of 0.8995 and 1.0926, respectively. The next possible downside target for the aussie is seen around 0.87 against the loonie and 1.07 against the kiwi.
The NZ dollar fell to 2-day lows of 0.6016 U.S. dollar and 1.9516 against the euro, from Thursday's closing quotes of 0.6036 and 1.9475, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.59 against the greenback and 1.97 against the euro.
Against the yen, the kiwi edged down to 88.52 from an early 9-day high of 88.90. The kiwi is likely to find support around the 86.00 region.
The Canadian dollar fell to a 3-day low of 1.3666 against the U.S. dollar, from yesterday's closing value of 1.3641. If the loonie extends its downtrend, it is likely to find support around the 1.38 region.
Against the yen, the loonie slid to 107.55 from an early 2-day high of 108.03. The loonie may test support near the 105.00 region.
The loonie edged down to 1.6056 against the euro, from Thursday's closing value of 1.6033. The next possible downside target for the loonie is seen around the 1.61 region.
Looking ahead, U.S. durable goods orders for June, Canada budget balance for May and U.S. Baker Hughes oil rig count data are slated for release in the New York session.
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