CANBERA (dpa-AFX) - The commodity currencies such as Australia, the New Zealand and the Canadian dollars strengthened against their major counterparts in the Asian session on Thursday amid increased risk appetite by the investors, after U.S. President Donald Trump said the U.S. was closing in on the trade deal with China. Traders also remain optimistic about the U.S. Fed cutting interest rates as early as September based on the recent economic data from the U.S.
Strong exporting data from China also led to the upturn of the commodity-linked currencies such as the AUD, NZD and CAD.
China's exports beat forecasts in July as manufacturers capitalized on a temporary tariff truce with the U.S. to ship goods before an impending deadline.
The truce ends next week, with Trump indicating that China could face secondary sanctions or additional tariffs for buying Russian oil.
'It may happen ... I can't tell you yet,' Trump told reporters. 'We did it with India. We're doing it probably with a couple of others. One of them could be China.'
Data from customs office showed that China's exports grew at a faster-than-expected pace in July. Exports surged 7.2 percent on a yearly basis, following June's 5.8 percent increase. Exports were forecast to climb 5.4 percent.
At the same time, imports climbed unexpectedly by 4.1 percent from a year ago after rising 1.1 percent in June. Exports were forecast to fall 1.0 percent.
As a result, the trade surplus fell to $98.24 billion from $114.77 billion in June. The surplus was seen at $105.2 billion.
The AUD, NZD and CAD gain benefits from a declining U.S. Dollar that stays under pressure following last week's payroll data indicating a weakening labor market and raising expectations for additional Fed monetary easing soon.
Investors are now focusing on the U.S. weekly Jobless claims report, which is coming out later today, to gain a clearer understanding of employment trends. In that regard, an additional negative shock could give the Fed more justifications for reducing rates in September and may increase selling pressure on the USD.
Oil prices rebounded after a five-day drop on supply concerns.
Data released by the US EIA in its Petroleum Status Report revealed that for the week ending August 1, the crude oil inventories in the US fell by 3.029 million barrels; gasoline stocks fell by 1.323 million barrels; and net crude imports fell by 794,000 barrels per day.
Data released by API on Tuesday revealed that US crude oil inventories fell by 4.2 million barrels for the week ending August 1.
Moreover, distillate fuel production decreased to 104,000 barrels; distillate stocks decreased to 565,000 barrels; and gasoline production decreased to 239,000 barrels
OPEC+ will complete the unwinding of its largest voluntary production cut next month after the member-nations agreed this weekend to boost output by 547,000 barrels per day in September. The group had agreed for a rollback of the 2.2 million bpd cuts. The group is attempting to capitalize on peak summer demand which will come to an end in September.
Reportedly, oil demand in Asia is not as strong as it is supposed to be due to the ongoing trade war with the US. Chinese refiners are increasing their stockpiles in order to lower imports.
In other economic news, data from the Australian Bureau of Statistics showed that Australia posted a seasonally adjusted merchandise trade surplus of A$5.365 billion in June. That beat expectations for a surplus of A$3.180 billion and was up from the downwardly revised A$1.604 billion in May.
Exports jumped 6.0 percent on month to A$44.318 billion following the downwardly revised 3.0 percent decline in the previous month.
Imports dropped 3.1 percent on month after climbing a downwardly revised 3.3 percent a month earlier (originally 3.8 percent).
In the Asian trading today, the Australian dollar rose to a 6-day high of 96.10 against yen, from yesterday's closing value of 95.67. The aussie may test resistance around the 97.00 region.
Against the U.S. and the Canadian dollars, the aussie advanced to 8-day highs of 0.6500 and 0.8929 from Wednesday's closing quotes of 0.6500 and 0.8929, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.66 against the greenback and 0.90 against the loonie.
The aussie edged up to 1.7887 against the euro, from yesterday's closing value of 1.7944. On the upside, 1.75 is seen as the next resistance level for the aussie.
The NZ dollar rose to an 8-day high of 0.5959 against the U.S. dollar and a 6-day high of 87.74 against the yen, from yesterday's closing quotes of 0.5928 and 87.26, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.61 against the greenback and 89.00 against the yen.
Against the euro, the kiwi edged up to 1.9590 from an early more than a 2-week low of 1.9680. The kiwi is likely to find resistance around the 1.91 region.
The kiwi edged up to 1.0947 against the Australian dollar, from Wednesday's closing value of 1.0965. On the upside, 1.08 is seen as the next resistance level for the kiwi.
The Canadian dollar rose to nearly a 2-week high of 1.3725 against the U.S. dollar and a 6-day high of 107.52 against the yen, from yesterday's closing quotes of 1.3740 and 107.15, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.36 against the greenback and 109.00 against the yen.
Looking ahead, The Bank of England is set to announce its decision at 7.00 AM ET in the European session. The bank is widely expected to cut its interest rates for the fifth time in a year to support the economy even as inflation continued to stay stubbornly above the target. The bank will also publish its quarterly monetary policy report along with the policy statement.
Markets anticipate a quarter-point cut, bringing the bank rate to 4.00 percent, which will be the lowest since early 2023.
The bank has shifted its focus on supporting the economy as it faces challenges from the labor market, geopolitical tensions and tariff uncertainty.
In the New York session, U.S. weekly jobless claims data, Canada Ivey PMI for July, U.S. wholesale inventories for June, U.S. consumer inflation expectations for July and consumer credit change for June are slated for release.
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