CANBERA (Alliance News) - The commodity currencies such as the New Zealand, Australian and the Canadian dollars climbed in European deals on Tuesday, as demand for riskier assets improved following the People's Bank of China's decision to slash interest rates and the reserve requirements on its banks. The interest rates were reduced by 0.25 percentage points each, the central bank said in a statement on its website. The benchmark one-year lending rate was cut to 4.6% and the deposit rate was slashed to 1.75%. The new rates are effective from August 26. The latest easing cycle began in November last year, when the bank cut the lending rate for the first time in more than two years. The renminbi deposit reserve ratio was lowered by 0.5 percentage points, effective September 6. The bank said the reduction was intended to maintain reasonably adequate liquidity in the banking system, and promote steady moderate growth of money and credit. Oil prices rebounded, but remained near Monday's 6-1/2-year lows due to continued worries over supply glut. Crude for October delivery rose USD1.06 to USD39.30 a barrel. The American Petroleum Institute is due to release weekly crude inventories data later in the day, while the Energy Information Administration will publish official data on Wednesday. While the aussie and the kiwi were trading modestly higher in the Asian session, the loonie turned mixed against its major rivals. The loonie advanced against the euro and the yen, but dropped against the greenback and the aussie. In European deals, the loonie, which fell to an 11-year low of 1.3297 against the greenback at 2:40 am ET, reversed direction and advanced to a 4-day high of 1.3143. The loonie finished Monday's trading at 1.3285. The loonie is seen challenging resistance around the 1.30 zone. The loonie rebounded to 91.34 against the yen and 1.5094 against the euro, from its early lows of 89.00 and 1.5434, respectively. The next possible resistance for the loonie may be located around 92.00 against the yen and 1.51 against the euro. The NZ dollar reversed from its early lows of 0.6428 against the greenback, 76.13 against the yen and 1.8001 against the euro, edging up to 0.6560, 78.78 and 1.7488, respectively. If the kiwi continues rise, it is likely to find resistance around 0.67 against the greenback, 80.00 against the yen and 1.72 against the euro. The aussie advanced to 0.7249 against the greenback, 87.15 against the yen and 1.5822 against the euro, from its early lows of 0.7127, 84.47 and 1.6250, respectively. Further uptrend may lead the aussie to resistance levels of around 0.73 against the greenback, 88.00 against the yen and 1.55 against the euro. Meanwhile, the aussie held steady against the NZ dollar throughout today's trading, with the pair moving in the 1.1122-1.1008 range. Looking ahead, US FHFA house price index and US S&P Case-Shiller home price index, both for June, US consumer confidence for August and new home sales for July are set to be released in the New York session. At 10:00 am ET, Congressional Budget Office releases update to the "Budget and Economic Outlook: 2015-2025" in Washington D.C. At 12:25 pm ET, Bank of Canada Deputy Governor Lawrence Schembri will speak at the Canadian Association for Business Economics' policy conference in Kingston, Canada.

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