Australian Dollar Falls Amid Risk Aversion
April 25 2016 - 8:44PM
RTTF2
The Australian dollar weakened against the other major
currencies in the Asian session on Tuesday following the negative
cues from Wall Street and as oil prices eased overnight. Investors
preferred to stay on the sidelines ahead of central bank policy
decisions due for the week.
Crude oil futures turned lower Monday on a private estimate that
showed that supplies in Cushing, Oklahoma storage facilities
continued to rise. This is the main delivery hub in the U.S.
Investors also remain cautious ahead of the U.S. Federal
Reserve's two-day policy meeting starting later today.
The Federal Reserve is not expected to lift rates at this
meeting, but the markets will be looking for clues on whether a
June rate hike is on the table.
The Bank of Japan also meets this week and expectations that it
would help banks lend by offering a negative rate on some loans are
rising.
Monday, the Australian dollar showed mixed performance against
its major rivals. While the aussie fell against the U.S. dollar,
the euro and the Canadian dollar, it rose against the NZ dollar.
Meanwhile, the aussie held steady against the yen.
In the Asian trading, the Australian dollar fell to an 8-day low
of 1.4624 against the euro, from yesterday's closing value of
1.4600. The aussie may test support near the 1.51 region.
Against the yen and the NZ dollar, the aussie dropped to 4-day
lows of 85.44 and 1.1199 from yesterday's closing quotes of 85.77
and 1.1248, respectively. If the aussie extends its downtrend, it
is likely to find support around 82.00 against the yen and 1.10
against the kiwi.
Against the U.S. and the Canadian dollars, the aussie edged down
to 0.7706 and 0.9763 from yesterday's closing quotes of 0.7714 and
0.9776, respectively. On the downside, 0.74 against the greenback
and 0.95 against the loonie are seen as the next support levels for
the aussie.
Looking ahead, U.K. BBA mortgage approvals for March is due to
be released later in the day.
In the New York session, U.S. durable goods orders for March,
S&P/Case-Shiller U.S. house price index for February, the
Conference Board's U.S. consumer confidence index for April and the
Richmond Fed's regional manufacturing index for April are due. At
8:55 am ET, Bank of Canada Governor Stephen Poloz is expected to
speak at the Canada-US Securities Summit in New York.
At 1:00 pm ET, Bank of England Deputy Governor Jon Cunliffe will
speak at the Ross Goobey Memorial Lecture in London.
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