Commodity currencies slide from multi month high

Commodity currencies slide from multi month high

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The rally on Thursday led the commodity currencies to plunge as there was a sideswiped following the strong raw material prices triggering selling against the yen. As mentioned by some analysts, it was inevitable, as traders had been waiting to draw benefits from their investments. 

Some traders were of the thoughts that there was no clear indication of the move. However, some had an unsubstantiated belief that the cash-strapped China Evergrande could announce something that could help ease the battle. 

The Australian dollar plunged to $0.7501 by 0.2% lower. It had reached more than three and a half high of USD 0.75465 in the day earlier. 

Meanwhile, the Australian dollar dropped against the yen to 85.58 by 0.5 per cent. Interestingly, it had hit a 4-year high of 86.25. 

Notably, the New Zealand dollar ended its longest-running streak of 10-days against the yen since 2014. However, it lost 0.3 per cent and was reduced to 82.04 Japanese currency. 

The US dollar plunged to 114.2 against the yen, losing 0.2 per cent. It veered off its four-year peak that it hit on Wednesday (114.695). 

On the other hand, the European currencies took a firmer stand. The euro traded flat at USD 1.1664. It stayed closer to the three-week peak of Tuesday, USD 1.1670. 

Sterling slipped to $1.3807, losing 0.1 per cent. It was led by the perspective that the  Bank of England would raise the interest rates the next month. It would be a step to cut down inflation. 

The sterling has been rallying higher against the euro since February 2020. It traded at 84.33 pence/euro. 

On the other side, the dollar index remained steady at 93.612. Moreover, it has plunged more than 1.1 per cent after hitting a 15-month high the last week. 

 

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