Australian, NZ Dollars Decline On Fed, Ukraine Concerns
The Australian and NZ dollars weakened against their major
counterparts in the Asian session on Tuesday, as Asian stocks
dropped on growing concerns over the possibility of the Federal
Reserve tightening monetary policy aggressively as well as the
threat of a Russian invasion into Ukraine.
The Fed meeting will begin later today, although no policy
change is expected.
Investors await the Fed statement for more clues about the
timing and pace of rate hikes for this year.
U.S.-Russia tensions escalated amid a continued buildup of
Russian troops near the border of Ukraine.
The U.S. placed 85,000 troops on high alert in order to support
NATO forces in Eastern Europe if needed.
The aussie initially got a support from stronger-than-expected
inflation data out of Australia, but it eased during the course of
the trading session.
Data from the Australian Bureau of Statistics showed that
consumer prices in Australia were up 3.5 percent on year in the
fourth quarter of 2021. .
That exceeded expectations for an increase of 3.2 percent and
was up from 3.0 percent in the third quarter.
The aussie dropped to 0.7129 against the greenback and 1.5865
against the euro, off its prior highs of 0.7175 and 1.5771,
respectively. The aussie is poised to find support around 0.70
against the greenback and 1.60 against the euro.
The aussie retreated to 81.05 against the yen and 0.9020 against
the loonie, following its early high of 81.78 and a 5-day high of
0.9055, respectively. The aussie may locate support around 78.00
against the yen and 0.88 against the loonie.
Pulling away from its previous highs of 0.6709 against the
greenback and 76.49 against the yen, the kiwi declined to 0.6669
and 75.83, respectively. On the downside, 0.65 and 74.00 are
possibly seen as its next support levels against the greenback and
the yen, respectively.
The kiwi was down at 1.6961 against the euro and 1.0699 against
the aussie, reversing from its prior highs of 1.6869 and 1.0645,
respectively. Next key support for the currency is likely seen
around 1.70 against the euro and 1.09 against the aussie.
Looking ahead, German Ifo business sentiment index for January
is due in the European session.
U.S. consumer confidence index for January, FHFA's house price
index and S&P/Case-Shiller home price index for November will
be out in the New York session.
NZD vs Yen (FX:NZDJPY)
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