The Australian and NZ dollars fell against their major counterparts in the Asian session on Friday, as U.S.-China tensions escalated after China ordered the closure of the U.S. consulate in the southwestern city of Chengdu.

The move was in retaliation for the closure of the Chinese consulate in Houston following allegations of spying.

Flash data from IHS Markit showed that Australia's private sector gathered momentum in July following the downturn caused by the coronavirus pandemic.

The flash Commonwealth Bank composite output index rose to 57.9 in July from 52.7 in June. A score above 50 indicates expansion in the sector.

The aussie declined to 3-day lows of 1.0686 against the kiwi and 0.7074 against the greenback, reversing from its early highs of 1.0714 and 0.7125, respectively. The next likely support for the aussie is seen around 1.045 against the kiwi and 0.68 against the greenback.

The aussie also slipped to 3-day lows of 75.31 against the yen and 0.9497 against the loonie, from its previous highs of 75.97 and 0.9536, respectively. The aussie is poised to challenge support around 72.00 against the yen and 0.92 against the loonie.

The aussie dropped to a 4-day low of 1.6389 against the euro, down from an early high of 1.6302. Next immediate support for the aussie is seen near the 1.66 region.

The kiwi recorded 3-day lows of 0.6618 against the greenback and 70.43 against the yen, after rising to 0.6654 and 70.92, respectively in early deals. The kiwi is seen challenging support around 0.63 against the greenback and 68.00 against the yen.

The kiwi depreciated to more than a 3-week low of 1.7530 against the euro, following a high of 1.7456 hit at 9:00 pm ET. On the downside, 1.78 is possibly seen as its next support level.

Looking ahead, PMI reports from major European economies are due in the European session.

U.S. new home sales for June will be featured in the New York session.

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