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 Wednesday, as investors remained cautious after the U.S. Fed recently forecast another rate hike before the end of the year and keeping rates at elevated levels for longer than previously anticipated.

Minneapolis Federal Reserve President Neel Kashkari also wrote in an essay posted on Tuesday that there is a 40 percent chance the Federal Reserve will have to push rates "meaningfully higher" to combat stubborn services inflation.

In economic news, Australia's monthly Consumer Price Index (CPI) indicator rose 5.2 percent in the year to August 2023, accelerating from a 4.9 percent gain in the year to July 2023 and matched the market consensus. It was the first increase in annual inflation since April. Inflation remained well above the Reserve Bank of Australia's target range of 2 to 3 percent.

In the Asian trading today, the Australian dollar fell to more than a 2-week low of 0.6377 against the U.S. dollar, from yesterday's closing value of 0.6396. The aussie may test support near the 061 region.

Against the yen and the euro, the aussie dropped to a 5-day low of 95.05 and a 2-day low of 1.6561 from yesterday's closing quotes of 95.33 and 1.6523, respectively. If the aussie extends its downtrend, it is likely to find support around 91.00 against the yen and 1.68 against the euro.

The aussie edged down to 0.8623 against the Canadian dollar, from yesterday's closing value of 0.8644. On the downside, 0.84 is seen as the next support level for the aussie.

The NZ dollar fell to a 5-day low of 0.5923 against the U.S. dollar, from yesterday's closing value of 0.5944. The next support level faced by the kiwi is seen around the 0.57 region.

Against the yen and the euro, the kiwi dropped to 2-day lows of 88.29 and 1.7830 from yesterday's closing quotes of 88.58 and 1.7774, respectively. If the kiwi extends its downtrend, it is likely to find support around 86.00 against the yen and 1.81 against the euro.

The kiwi edged down to 1.0772 against the Australian dollar, from yesterday's closing value of 1.0755. On the downside, 1.09 is seen as the next support level for the kiwi.

Looking ahead, the European Central Bank is set to release euro area monetary aggregates for August at 4:00 am ET in the European session. M3 money supply is forecast to fall 1.0 percent annually after a 0.4 percent drop in July.

In the New York session, U.S. MBA mortgage approvals data, U.S. durable goods orders data for August and U.S. EIA crude oil data are slated for release.