Australian, NZ Dollars Decline Amid Rising Risk Aversion
02 Juni 2022 - 05:26AM
RTTF2
The Australian and NZ dollars fell against their major
counterparts in the Asian session on Thursday amid rising risk
aversion, as strong ISM manufacturing data and hawkish Fed speeches
sparked speculation that the central bank may need to stick with
aggressive policy tightening to control price pressures.
San Francisco Fed President Mary Daly said on Wednesday that the
central bank should tame inflation rapidly with aggressive rate
hikes. Daly added that she expects half-point interest rate hikes
in the next couple of meetings and take rates to 2.5 percent
quickly.
St. Louis Federal Reserve Bank President James Bullard said that
the current U.S. macroeconomic situation is straining the central
bank's credibility with respect to its inflation target.
Traders are now assigning a 60 percent possibility for another
50 basis point hike in September.
Asian stock markets are mostly lower, following the broadly
negative cues overnight from Wall Street, as JPMorgan Chase CEO
Jamie Dimon urged investors to brace for an economic hurricane.
The aussie dropped to a 6-day low of 0.7141 against the
greenback and a 2-day low of 0.9059 against the loonie, down from
its prior highs of 0.7178 and 0.9089, respectively. The next
possible support for the aussie is seen around 0.68 against the
greenback and 0.88 against the loonie.
The Australian currency eased off to 1.1053 against the kiwi,
from more than a 2-week high of 1.1078 hit at 9:45 pm ET. The
aussie may locate support around the 1.075 level.
Retreating from its previous highs of 93.44 against the yen and
1.4824 against the euro, the aussie edged down to 92.84 and 1.4918,
respectively. If the aussie continues its fall, 90.00 and 1.52 are
possibly seen as its next support levels against the yen and the
euro, respectively.
The kiwi weakened to 83.99 against the yen and 1.6490 against
the euro, after rising to 84.43 and 1.6407, respectively in early
deals. The kiwi is poised to challenge support around 79.00 against
the yen and 1.66 against the euro.
The kiwi slipped to a 1-week low of 0.6460 against the
greenback, from a high of 0.6488 seen at 8:15 pm ET. Next key
support for the kiwi is likely seen around the 0.62 level.
Looking ahead, Eurozone PPI for April is due in the European
session.
U.S. ADP private payrolls data for May is scheduled for release
at 8:15 am ET.
Canada building permits for April, U.S. weekly jobless claims
for the week ended May 28 and factory orders for April will be
released in the New York session.
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