Australian, NZ Dollars Fall Amid Risk Aversion
November 17 2017 - 1:20AM
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The Australian and NZ dollars slipped against their major
counterparts in early European deals on Friday, as European shares
dropped on disappointing earnings updates and investors digested
comments by ECB President Mario Draghi at the Frankfurt European
Banking Congress.
The German DAX was down 0.1 percent, France's CAC 40 index was
declining 0.2 percent and the U.K.'s FTSE 100 was losing 0.3
percent.
Speaking in Frankfurt, the European Central Bank President Mario
Draghi defended the bank's monetary policy, saying there is little
evidence that the monetary policy is currently doing harm to banks'
profitability.
"If there are any negative effects of low rates on net interest
income in the future, they should be largely offset by the positive
effects of monetary stimulus on the other main components of
profitability, such as the quality of loans and therefore on
loan-loss provisions," he told.
In the U.S., Special Counsel Robert Mueller issued subpoena to
over a dozen top campaign officials in mid-October, calling for
documents and emails related to Russia, the Wall Street Journal
reported.
Investors look ahead to U.S. housing starts data due for release
later in the day for more direction.
In economic front, data from Statistics New Zealand showed that
NZ's output producer price index rose 1.0 percent on quarter in the
third quarter of 2017.
That followed the 1.3 percent increase in the previous three
months.
Both the aussie and the kiwi dropped against their major rivals
in the Asian session.
The kiwi weakened to a 1-1/2-year low of 0.6783 against the
greenback, off its early 2-day high 0.6883. The next possible
support for the kiwi is seen around the 0.66 region.
The kiwi slipped to a 6-month low of 76.36 versus the yen, 3-day
low of 1.1130 versus the aussie and more than a 2-year low of
1.7386 against the euro, from its early highs of 77.51, 1.1043 and
1.7166, respectively. If the kiwi extends decline, 75.00, 1.12 and
1.75 are likely seen as its next support levels against the yen,
the aussie and the euro, respectively.
Simultaneously, the aussie declined to a 1-1/2-year low of
1.5638 versus the euro, near 5-month lows of 0.7542 versus the
greenback and 84.87 versus the yen, coming off from its early highs
of 1.5504, 0.7608 and 85.85, respectively. The aussie may possibly
challenge support around 0.73 against the greenback, 83.00 against
the yen and 1.58 against the euro.
The aussie hit 0.9617 against the loonie, its lowest since July
2016. Next key support for the aussie-loonie pair is seen around
the 0.94 mark.
Looking ahead, at 8:00 am ET, Deutsche Bundesbank President Jens
Weidmann speaks at the Frankfurt European Banking Congress.
In the New York session, Canada CPI, U.S. housing starts and
building permits for October are due.
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