Antipodean Currencies Slide Amid Risk Aversion

(RTTNews) - Antipodean currencies such as the Australia and the New Zealand dollars weakened against their major currencies in the Asian session on Monday. This, amidst risk aversion, as investors remain cautious after data showing a bigger-than-expected increase in U.S. producer prices in July triggered some speculation that the U.S. Fed may decide to keep interest rates higher for longer duration.

The strength of the U.S. dollar against major Asian currencies is also weighing on the market.

A separate report released by the University of Michigan also showed a slight pullback in U.S. consumer sentiment in August. Weakness in miners, technology and financial stocks also weighed on the investor sentiment.

In economic news, data from Business NZ showed that the services sector continued to contract in July, and at a faster pace, with a Performance of Services Index score of 47.8. That's down from the downwardly revised score of 49.6 in June.

In the Asian trading today, the Australian dollar fell to more than a 3-year low of 1.6930 against the euro and a 5-day low of 93.58 against the yen, from Friday's closing quotes of 1.6387 and 94.20, respectively. If the aussie extends its downtrend, it may find support around 1.71 against the euro, and 90.00 against the yen.

Against the U.S. and the Canadian dollars, the aussie dropped to a 2-1/2-month low of 0.6457 and a 9-month low of 0.8690 from last week's closing quotes of 0.6498 and 0.8732, respectively. The aussie may test support near 0.62 against the greenback and 0.84 against the loonie.

The NZ dollar fell to nearly a 3-1/2-year low of 1.8361 against the euro from Friday's closing value of 1.8283. On the downside, 1.86 is seen as the next support level for the kiwi.

Against the U.S. dollar and the yen, the kiwi dropped to a 9-month low of 0.5954 and a 1-week low of 86.28 from last week's closing quotes of 0.5982 and 86.72, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.56 against the greenback and 84.00 against the yen.

Meanwhile, the safe-haven currencies such as the U.S. dollar and the yen strengthened against their major currencies as Asian shares fell.

The U.S. dollar rose to 6-day highs of 1.0929 against the euro and 1.3470 against the Canadian dollar from last week's closing quotes of 1.0944 and 1.3438, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.06 against the euro and 1.37 against the loonie.

Against the Swiss franc, the greenback advanced to a 5-day high of 0.8781 from Friday's closing value of 0.8767. The greenback may test resistance near the 0.90 region.

The greenback edged up to 1.2666 against the pound from Friday's closing value of 1.2694. On the upside, 1.23 is seen as the next resistance level for the greenback.

The yen rose to a 4-day high of 158.26 against the euro from Friday's closing value of 158.64. The yen is likely to find its resistance level around the 150.00 region.

Against the pound and the Swiss franc, the yen advanced to 183.50 and 164.92 from last week's closing quotes of 184.01 and 165.27, respectively. If the yen extends its uptrend, it may find resistance around 176.00 against the pound and 158.00 against the franc.

Against the U.S. and the Canadian dollars, the yen edged up to 144.66 and 107.55 from an early 9-month low of 145.23 and a 2-week low of 107.98, respectively. On the upside, 136.00 against the greenback and 104.00 against the loonie are seen as the next resistance levels for the yen.

Looking ahead, German wholesale price index for July is due to be released at 2:00 am ET.

In the New York session, U.S. consumer inflation expectations for July and Bank of Canada senior loan officer survey for the second quarter are slated for release.