Australian, NZ Dollars Drop Amid Rising Risk Aversion
The Australian and NZ dollars fell against their major
counterparts in the Asian session on Thursday, as Asian markets
followed Wall Street lower, after the Fed warned of a slowdown in
the pace of the economic recovery in the wake of the coronavirus
The Fed kept its monetary policy unchanged, but highlighted the
recent worsening of the economic data amid the ongoing crisis.
The central bank cautioned that the pace of the recovery in
economic activity and employment has moderated in recent
The economy was still a long way from a complete recovery, which
depends prominently on the course of the virus.
Data from the Australian Bureau of Statistics showed that
Australia export prices rose 5.5 percent on quarter in the fourth
quarter of 2020 - beating forecasts for a decline of 1.3 percent
following the 5.1 percent drop in Q3.
Import prices sank 1.0 percent on quarter versus expectations
for a fall of 2.4 percent after sinking 3.5 percent in the three
Data from Statistics New Zealand showed that New Zealand posted
a merchandise trade surplus of NZ$17 million in December -
following the NZ$252 million surplus in November.
Exports fell NZ$149 million or 2.7 percent on year to NZ$5.35
billion, while imports rose NZ$213 million or 4.2 percent to
The aussie depreciated to a fresh 3-week low of 1.5867 against
the euro, fresh 4-week low of 0.7621 against the greenback and a
1-week low of 0.9779 versus the loonie, down from its prior highs
of 1.5789, 0.7666 and 0.9812, respectively. The aussie is seen
finding support around 1.62 against the euro, 0.72 against the
greenback and 0.96 versus the loonie.
The Australian currency hovered at more than a 3-week low of
79.49 against the yen, compared to Wednesday's close of 79.73. The
aussie is likely to target support around the 76.00 mark.
The aussie reversed from an early high of 1.0711 against the
kiwi, reaching as low as 1.0684. On the downside, 1.045 is possibly
seen as its next support level.
Pulling away from its previous highs of 0.7162 against the
greenback, 74.59 against the yen and 1.6896 against the euro, the
kiwi weakened to an 8-day low of 0.7121, 1-week low of 74.29 and a
6-day low of 1.6975, respectively. The kiwi is poised to target
support around 0.70 against the greenback, 72.00 against the yen
and 1.72 against the euro.
Looking ahead, Eurozone economic confidence index for January
will be released in the European session.
At 8.00 am ET, Destatis is scheduled to issue German preliminary
consumer inflation for January.
In the New York session, Canada building permits for December,
U.S. GDP data for the fourth quarter, weekly jobless claims for the
week ended January 23, wholesale inventories, new home sales and
advance goods trade balance for December will be published.