The Ukraine situation has also remained an issue for risk assets. In a clear sign that investors are unsettled, copper has taken over from iron ore as the sellers’ commodity of choice.
Talk of lifting margins for Shanghai copper futures along with growth fears have been the key factors weighing on the commodity. Shanghai copper is down 4.5% since the close of yesterday’s trade. This move in copper prices also took down commodity currencies like the AUD and CAD, along with emerging market currencies. The TRY, MXN, BRL, ZAR all lost ground to the greenback.
Key near-term support being tested
After having held remarkably well yesterday, AUD/USD has finally given up its grip on the 0.90 handle as the bad news continues to mount. The pair even held despite disappointing NAB business confidence and conditions data yesterday.
AUD/USD was holding at 0.897 ahead of Westpac consumer sentiment and home loans data today. Both readings disappointed, but AUD/USD just managed to hold its ground at 0.896. This level also happens to be short-term support in an uptrend from February 1 through March 3 on the daily chart. It is also the 38.2% retracement of the recovery from January lows to March highs just above 0.91. As a result this will be a real test for the bulls in the near term to see if this level will be defended.
Tomorrow will be a key day of data with local jobs numbers due out along with China’s industrial production. The market is looking for a 9.5% rise and a miss in this data could trigger a significant slide in commodities and the AUD.