Commodity Currencies Advance Amid Risk

(RTTNews) - The Fortunecommodity currencies such as Australia, the New Zealand and the Canadian dollars strengthened against their major currencies in the Asian session on Wednesday, as investors risk-on mood increased amid optimism about earlier interest rate cuts by the U.S. Fed after U.S. consumer confidence deteriorated by more than expected in the month of March. Traders are also optimistic about some tariff exemptions by the U.S. administration as they seek greater clarity on the next round of tariffs.

Trump said at an event on Monday that he "may give a lot of countries breaks" on reciprocal tariffs that are set to take effect April 2. Gains across most sectors led by mining and financial stocks, also led to the upturn of AUD, NZD and CAD.

Anticipated Chinese stimulus measures targeted at increasing spending may also provide support for the AUD and NZD. Given China's position as a major trading partner, the Chinese Communist Party and State Council have put up plans to "vigorously boost consumption" by raising wages and reducing financial burdens.

On the CAD's front, traders remain cautious in light of the upcoming April 2 U.S. trade sanctions and the uncertainty surrounding the Canadian general election.

In surveys taken just before the campaign began on Sunday, the official opposition Conservatives and the ruling Liberal Party were virtually matched as Canadian elections draw near.

In economic news, Australia's monthly Consumer Price Index (CPI) increased 2.4 percent on year in February 2025, down from a four-month high of 2.5 percent in the previous month, and below market expectations of 2.5 percent. This marked the lowest inflation rate since November 2024. The annual trimmed mean inflation edged down to 2.7 percent from 2.8 percent in January.

In the Asian trading today, the Australian dollar rose to a 1-week high of 95.19 against the yen, from a recent 2-day low of 94.27. The aussie may test resistance around the 97.00 region.

In economic news, Producer prices in Japan were flat on month in February, the Bank of Japan said on Wednesday - after slipping 0.5 percent in January. On a yearly basis, producer prices were up 3.0 percent, easing from an upwardly revised 3.2 percent in the previous month (originally 3.1 percent). Excluding international transportation, producer prices were up 0.1 percent on month and 3.1 percent on year.

Against the euro, the aussie advanced to nearly a near 3-week high of 1.7061 from a recent low of 1.7168. The next possible upside target for the aussie is seen around the 1.67 region.

The aussie edged up to 0.6324 against the U.S. dollar, from a recent low of 0.6279. On the upside, 0.64 is seen as the next resistance level for the aussie.

Moving away from a recent 2-day low of 0.8977 against the Canadian dollar, the aussie edged up to 0.9018. If the aussie extends its uptrend, it is likely to find resistance around the 0.92 region.

The NZ dollar rose to a 2-day high of 0.5756 against the U.S. dollar, from a recent low of 0.5715. The kiwi may test resistance around the 0.58 region.

Against the yen and the euro, the kiwi advanced to 6-day highs of 86.63 and 1.8740 from recent lows of 85.80 and 1.8862, respectively. The next possible upside target for the kiwi is seen around 88.00 against the yen and 1.85 against the euro.

Against the Australian dollar, the kiwi edged up to 1.0794 from a recent low of 1.1004. On the upside, 1.07 is seen as the next resistance level for the kiwi.

The Canadian dollar rose to nearly a 5-week high of 105.65 against the yen and nearly a 3-week high of 1.4247 against the U.S. dollar, from recent lows of 104.97 and 1.4299, respectively. If the loonie extends its uptrend, it is likely to find resistance around 108.00 against the yen and 1.41 against the greenback.

Against the euro, the loonie climbed to a 3-week high of 1.5367 from a recent low of 1.5412. the loonie may test resistance around the 1.48 region.

Looking ahead, U.S. MBA mortgage approvals data, Canada wholesale sales data for February, U.S. durable goods orders for February and U.S. EIA crude oil data are slated for release in the New York session.

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