Antipodean Currencies Fall 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 Thursday amid risk aversion, as investors remained cautious after the U.S. Fed indicated it will continue to hold interest rates higher for longer to contain inflation. The prospects of a possible downgrade of several U.S. lenders by Fitch Ratings and lingering concerns about China's economic slowdown also continued to weigh on sentiment.

The minutes from the Fed's July meeting said "most of the central bank officials continued to see significant upside risks to inflation, which could require further tightening of monetary policy."

Both the currencies started falling following the release of Australia's weak job's data in July.

Data from the Australian Bureau of Statistics showed that the unemployment rate in Australia came in at a seasonally adjusted 3.7 percent in July. That missed forecasts for 3.6 percent and was up from 3.5 percent in June.

The Australian economy lost 14,600 jobs last month versus expectations for an increase of 15,000 following the gain of 32.600 in the previous month. The participation rate was 66.7 percent, also missing forecasts for 66.8 percent, which would have been unchanged.

In the Asian trading today, the Australian dollar fell to more than a 3-year low of 1.7064 against the euro and a 9-day low of 93.23 against the yen, from yesterday's closing quotes of 1.6930 and 93.99, respectively. If the aussie extends its downtrend, it is likely to find support around 1.72 against the euro and 90.00 against the yen.

Against the U.S., the Canada and the New Zealand dollars, the aussie dropped to a 9-1/2-month low of 0.6365, a 9-month low of 0.8627 and a 1-week low of 1.0781 from Wednesday's closing quotes of 0.6423, 0.8691 and 1.0817, respectively. The aussie may test support near 0.62 against the greenback, 0.85 against the loonie and 1.06 against the kiwi. The NZ dollar fell to nearly a 3-1/2-year low of 1.8399 against the euro and a 9-month low of 0.5903 against the U.S. dollar, from yesterday's closing quotes of 1.8318 and 0.5935, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.86 against the euro and 0.58 against the greenback.

Against the yen, the kiwi edged down to 86.47 from Wednesday's closing value of 86.83. The kiwi is likely to find support near the 83.00 region.

Meanwhile, the safe-haven U.S. dollar also traded higher against other major currencies as Asian shares traded lower.

The U.S. dollar rose to nearly a 1-1/2-month high of 1.0861 against the euro, a 9-month high of 145.56 against the yen and a 2-1/2-month high of 1.3553 against the Canadian dollar, from yesterday's closing quotes of 1.0874, 146.35 and 1.3535, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.07 against the euro, 152.00 against the yen and 1.37 against the loonie,

Against the pound and the Swiss franc, the greenback edged up to 1.2711 and 0.8811 from Wednesday's closing quotes of 1.2727 and 0.8800, respectively. The greenback may test resistance around 1.24 against the pound and 0.90 against the franc.

Looking ahead, Eurostat will publish euro area foreign trade data for June at 5:00 am ET. Economists forecast the trade balance to post a surplus of EUR 18.3 billion compared to a shortfall of EUR 0.3 billion posted in May.

In the New York session, U.S. weekly jobless claims and U.S. Philadelphia manufacturing index for August are slated for release.