Antipodean Currencies Fall Amid Risk Aversion
March 14 2024 - 11:09PM
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Antipodean currencies such as the Australia and the New Zealand
dollars weakened against their major currencies in the Asian
session on Friday, as the Asian shares fell amid renewed concerns
about the U.S. Fed further postponing its first interest rate cut
to after June, following the release of hotter-than-expected
producer price inflation data for February.
According to analysts, sticky February U.S. consumer and
producer price inflation figures would be enough to knock the U.S.
central bank off course for rate cuts in June.
Losses in mining, financial and technology stocks, also weighed
on the investor sentiment.
Moreover, Asian markets traded lower, with Hong Kong's Hang Seng
index falling more than 2 percent as the People's Bank of China
held a key rate steady and drained cash from the banking system on
a net basis, signaling a cautious approach of using its monetary
policy to boost growth.
Also, data showed China's home prices dropped 1.4 percent
year-on-year in February, marking the steepest drop in 13 months
amid regulatory crackdowns.
In economic news, data from BusinessNZ showed that the
manufacturing sector in New Zealand continued to contract in
February, albeit at a slower pace, with a Performance of
Manufacturing Index score of 49.3. That's up from the upwardly
revised 47.5 reading in January, although it remains beneath the
boom-or-bust line of 50 that separates expansion from
contraction.
In the Asian trading today, the Australian dollar fell to a
3-day low of 1.6542 against the euro and a 2-day low of 97.33
against the yen, from yesterday's closing quotes of 1.6529 and
97.59, respectively. If the aussie extends its downtrend, it is
likely to find support around 1.67 against the euro and 95.00
against the yen.
Against the U.S. and the Canadian dollars, the aussie dropped to
a 9-day low of 0.6557 and an 8-day low of 0.8881 from Thursday's
closing quotes of 0.6580 and 0.8904, respectively. The aussie may
test support near 0.64 against the greenback and 0.87 against the
loonie.
The NZ dollar fell to a 1-1/2-month low of 1.0770 against the
Australian dollar and a 4-day low of 90.44 against the yen, from
yesterday's closing quotes of 1.0729 and 90.91, respectively. If
the kiwi extends its downtrend, it is likely to find support around
1.08 against the aussie and 89.00 against the yen.
Against the U.S. dollar and the euro, the kiwi dropped to 9-day
lows of 0.6095 and 1.7839 from Thursday's closing quotes of 0.6129
and 1.7742, respectively. The kiwi may test support near 0.59
against the greenback and 1.80 against the euro.
Meanwhile, the safe-haven currency, or the U.S. dollar rose
against its major rivals in the Asian session amid risk
aversion.
The U.S. dollar rose to 8-day highs of 1.0873 against the euro
and 148.66 against the yen, from yesterday's closing quotes of
1.0881 and 148.32, respectively. If the greenback extends its
uptrend, it is likely to find resistance around 1.07 against the
euro and 150.00 against the yen.
The greenback edged up to 1.2730 against the pound, from
yesterday's closing value of 1.2751. On the upside, 1.26 is seen as
the next resistance level for the greenback.
Against the Swiss franc and the Canadian dollar, the greenback
advanced to 9-day highs of 0.8851 and 1.3543 from Thursday's
closing quotes of 0.8838 and 1.3532, respectively.The greenback may
test resistance around 0.89 against the franc and 1.36 against the
loonie.
Looking ahead, Canada housing starts for February and wholesale
sales data for January, U.S. import and export price indices for
February, U.S. NY Empire State manufacturing index for March, U.S.
industrial production for February, U.S. University of Michigan
consumer sentiment for March and U.S. Baker Hughes oil rig count
data are slated for release in the New York session.
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