Australian, NZ Dollars Drop Amid Rising Risk Aversion
The Australian and NZ dollars depreciated against their major
counterparts in the Asian session on Tuesday, as a resurgence in
COVID-19 cases in China, the prospects of an imminent Fed rate hike
and ongoing conflict in Ukraine sapped risk appetite.
Market participants focused on the Federal Reserve's interest
rate decision due out on Wednesday.
The FOMC is expected to hike its benchmark rate by 25 basis
points for the first time in three years to control high
Officials from the United States and China held talks in Rome on
Monday and discussed a range of issues including Russia's war in
The White House said that US National Security Advisor Jake
Sullivan issued a harsh warning to China saying that it will face
significant consequences if it violates sanctions, or aids the war
A fourth round of talks between Russia and Ukraine ended without
a breakthrough on Monday and will continue today in an attempt to
end the conflict.
The aussie dropped to a fresh 2-week low of 0.7165 against the
greenback and a 5-day low of 84.76 against the yen, off its early
highs of 0.7206 and 85.22, respectively. The aussie may find
support around 0.70 against the greenback and 81.00 against the
Reversing from its early highs of 0.9236 against the loonie and
1.5178 against the euro, the aussie dropped to nearly 2-week lows
of 0.9202 and 1.5302, respectively. The aussie is seen finding
support around 0.90 against the loonie and 1.56 against the
The aussie slipped to 1.0644 against the kiwi, its lowest level
since January 24. If the aussie falls further, 1.045 is likely seen
as its next support level.
The kiwi depreciated to a fresh 2-week low of 0.6729 against the
greenback and a 5-day low of 79.41 against the yen, after rising to
0.6756 and 1.6185, respectively in early deals. The kiwi is likely
to challenge support around 0.65 against the greenback and 76.00
against the yen.
Pulling back from an early high of 1.6185 against the euro, the
kiwi fell to nearly a 2-week low of 1.6306. On the downside, is
possibly seen as its next support level.
Looking ahead, German ZEW economic sentiment for March is due
out in the European session.
At 8:15 am ET, Canada housing starts for February are scheduled
Canada manufacturing sales for January, U.S. PPI for February
and New York Fed's empire manufacturing survey for March are set to
be released in the New York session.
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