Australian, NZ Dollars Drop As Fed Concerns Weigh

(RTTNews) - The Australian and NZ dollars weakened against their major counterparts in the Asian session on Tuesday, on concerns over interest rate hikes from the Federal Reserve.

Investors awaited minutes of the Fed's latest policy meeting due to be released on Wednesday for more clarity on the outlook for inflation and the pace of interest-rate increases going ahead.

Markets expect the Fed to continue to raise rates early this year as inflation remained hot.

Flash survey results from S&P Global showed that Australia's private sector activity continued to contract in February, though at the slowest pace in four months amid easing cost pressures.

The Judo Bank flash composite output index rose to 49.2 in February from 48.5 in January. However, any score below 50 indicates contraction in the sector.

The aussie declined to 0.6874 against the greenback and 1.5509 against the euro, after rising to 0.6920 and 1.5440, respectively in early deals. The next likely support for the aussie is seen around 0.66 against the greenback and 1.56 against the euro.

The aussie fell to 92.55 against the yen and 0.9273 against the loonie, reversing from its early 6-day highs of 92.97 and 0.9311, respectively. The aussie is poised to challenge support around 90.00 against the yen and 0.91 against the loonie.

The kiwi depreciated to 1.7172 against the euro and 83.59 against the yen, from its early 5-day highs of 1.7041 and 84.09, respectively. Next immediate support for the kiwi is seen near 1.74 against the euro and 82.00 against the yen.

The kiwi reached as low as 1.1081 against the aussie. The kiwi may find support around the 1.12 level, should it drops again.

The kiwi was down against the greenback, at a 4-day low of 0.6208. On the downside, 0.60 is possibly seen as its next support level.

Looking ahead, PMI reports from major European economies and German ZEW economic sentiment for February are due out in the European session.

In the New York session, Canada retail sales for December and CPI for January, as well as U.S. existing home sales the same month will be featured.