Commodity Currencies Fall As Oil Prices Slide

Commodity currencies such as the Australian, the New Zealand, and the Canadian dollars weakened against their major counterparts in the Asian session on Wednesday, due to oversupply concerns.

Crude oil delivery for October is currently down 0.18 percent or $47.65 per barrel.

The concerns of oversupply were raised due to rising Libya's oil output. The country's largest oilfield, Sharara oil field, was restarted on Tuesday after a shutdown. Despite, data from the industry group, the American Petroleum Institute, showed that the crude inventories fell by 3.6 million barrels in the week to August 18 to 465.6 million.

In the Asian trading, the Australian dollar fell to a 1-week low of 1.4909 against the euro, from yesterday's closing value of 1.4858. The aussie may test support near the 1.50 region.

Against the U.S. dollar and the yen, the aussie dropped to a 5-day low of 0.7883 and a 2-day low of 86.30 from yesterday's closing quotes of 0.7909 and 86.65, respectively. If the aussie extends its downtrend, it is likely to find support around 0.77 against the greenback and 85.00 against the yen.

The NZ dollar fell to a 14-month low of 1.6275 against the euro and more than a 2-month low of 79.02 against the yen, from yesterday's closing quotes of 1.6159 and 79.73, respectively. If the kiwi extends its downtrend, it may find support around 1.65 against the euro and 77.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi dropped to a 1-week low of 0.7226 and nearly a 4-month low of 1.0918 from yesterday's closing quotes of 0.7278 and 1.0866, respectively. The kiwi may test support near 0.71 against the greenback and 1.10 against the aussie.

The Canadian dollar fell to a 2-day low of 1.2598 against the U.S. dollar, from yesterday's closing value of 1.2562. The loonie is likely to find support near the 1.29 region.

Against the euro, the yen and the Australian dollar, the loonie edged down to 1.4816, 86.81 and 0.9948 from yesterday's closing quotes of 1.4774, 87.19 and 0.9936, respectively. If the loonie extends its downtrend, it could find support around 1.49 against the euro, 85.00 against the yen, and 1.00 against the aussie.

Looking ahead, flash PMI reports from major European economies for August are due to be released shortly.

In the New York session, U.S. Markit's PMI reports for August, U.S. new home sales data for July, Eurozone consumer confidence index for August and U.S. weekly crude oil inventories data are slated for release.