Antipodean Currencies Slide Amid Risk-off Mood

(RTTNews) - The antipodean currencies such as the Australia and the New Zealand dollars weakened against their major currencies in the Asian session on Tuesday amid rising risk-off mood, as traders remain cautious amid uncertainty after U.S. President Donald Trump decided to postpone the implementation of 50% tariffs on the European Union goods to July 9 from June 1. The UK and US stock markets were shut for a holiday.

Trump decided to pause the levy following a call from EU Commission President Ursula von der Leyen.

"The EU and US share the world's most consequential and close trade relationship. Europe is ready to advance talks swiftly and decisively. To reach a good deal, we would need the time until July 9," Von der Leyen wrote on X.

Renewed trade tensions and mounting concerns about the U.S. budgetary also led to the fall of AUD and NZD. Investors are also concerned about the growing U.S. national deficit.

Traders also speculate the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) are likely to reduce its interest rates in their upcoming policy meetings.

The RBA is expected to decrease interest rates further in upcoming policy sessions. Last week, the Australian central bank lowered interest rates by 25 basis points. Furthermore, Governor Michele Bullock warned that the central bank is willing to take extra action if the economic outlook deteriorates significantly, raising the potential of future rate reduction.

The RBNZ interest rate decision will be the focus on Wednesday. The RBNZ is likely to reduce the Official Cash Rate (OCR) by 25 basis points (bps) to 3.25 percent at its May meeting to be held tomorrow.

In economic news, data from the National Bureau of Statistics showed that China's industrial profits increased in April despite higher US trade tariffs. Industrial profits grew 3.0 percent in April from the same period last year. This was better than a 2.6 percent rise seen in March.

During January to April, industrial profits registered an annual growth of 1.4 percent.

In the Asian trading today, the Australian dollar fell to nearly a 4-week low of 0.8874 against the Canadian dollar, from yesterday's closing value of 0.8901. The aussie may test support near the 0.87 region.

Against the U.S. dollar, the yen and the euro, the aussie slipped to 4-day lows of 0.6445, 92.14 and 1.7602 from Monday's closing quotes of 0.6480, 92.43 and 1.7575, respectively. If the aussie extends its downtrend, it is likely to find support around 0.62 against the greenback, 90.00 against the yen and 1.80 against the euro.

The NZ dollar fell to 4-day lows of 1.9045 against the euro and 0.5960 against the U.S. dollar, from yesterday's closing quotes of 1.8999 and 0.5994, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.99 against the euro and 0.57 against the greenback.

Against the yen and the Australian dollar, the kiwi edged down to 85.18 and 1.0829 from Monday's closing quotes of 85.50 and 1.0811, respectively. The kiwi may test support near 81.00 against the yen and 1.10 against the aussie.

Looking ahead, the Confederation of British Industry publishes Distributive Trades survey results for April is due to be released at 6:00 am ET in the European session. The retail sales balance is seen falling to -18 from -8 in April.

In the New York session, Canada wholesale sales data for April, U.S. durable goods orders for April, U.S. S&P/Case-Shiller home price index for March, U.S. Consumer Board's consumer confidence for May and U.S. Dallas Fed manufacturing index for May are slated for release.