2023.12.2707:11:00UTC+00Commodity Currencies Climb Amid Risk Appetite

Commodity currencies such as the Australia, the New Zealand and the Canadian dollars strengthened against their major currencies in the Asian session on Wednesday, as Asian shares traded higher amid optimism about the outlook for interest rates following last week's tamer-than-expected U.S. consumer price inflation data. Some traders also kept on the sidelines ahead of a relatively quiet last week of the year.

On the heels of the U.S inflation data, CME Group's FedWatch Tool is indicating a 72.7 percent chance the Federal Reserve will cut rates by a quarter point in March.

Crude oil prices surged amid escalating tensions in the Middle East and concerns over trade disruptions following attacks on ships. West Texas Intermediate Crude oil futures for February jumped $2.01 or 2.7 percent at $75.57 a barrel.

In the Asian trading today, the Australian dollar rose to more than a 6-month high of 1.6140 against the euro and nearly a 5-1/2-month high of 0.6841 against the U.S. dollar, from yesterday's closing quotes of 1.6179 and 0.6824, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.58 against the euro and 0.69 against the greenback.

The aussie climbed to an 8-day high of 97.55 against the yen, from yesterday's closing value of 97.16. On the upside, 99.00 is seen as the next resistance level for the aussie.

Against the Canada and the New Zealand dollars, the aussie edged up to 0.9022 and 1.0796, from yesterday's closing quotes of 0.9004 and 1.0784, respectively. The aussie may test resistance around 0.91 against the kiwi and 1.09 against the kiwi.

The NZ dollar rose to nearly a 5-1/2-month high 0.6337 against the U.S. dollar, from yesterday's closing value of 0.6326. If the kiwi extends its uptrend, it is likely to find resistance around the 0.64 region.

Against the euro and the yen, the yen advanced to 1-week highs of 1.7416 and 90.38 from yesterday's closing quotes of 1.7449 and 90.07, respectively. The kiwi may test resistance near 1.73 against the euro and 91.00 against the yen.

The Canadian dollar rose to nearly a 5-month high of 1.3186 against the U.S. dollar and an 8-day high of 108.17 against the yen, from yesterday's closing quotes of 1.3195 and 107.90, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.30 against the greenback and 110.00 against the yen.

Against the euro, the loonie edged up to 1.4554 from yesterday's closing value of 1.4570. On the upside, 1.44 is seen as the next resistance level for the loonie.

Looking ahead, Switzerland ZEW economic sentiment for December is due to be released at 4:00 am ET.

In the New York session, U.S. MBA mortgage approvals data, U.S. Redbook report, U.S. Richmond Fed manufacturing index for December and U.S. Dallas Fed services index for December are slated for release.