The Australian and the New Zealand dollars weakened against their major counterparts in the Asian session on Monday amid rising risk aversion, due to renewed worries about global economic growth following the U.S. Federal Reserve’s decision to keep interest rates at a record low last week. Additionally, weak commodity prices weighed on resource stocks.
Last Thursday’s Federal Reserve decision to leave interest rates unchanged pointed to continued uncertainty for the markets for at least the next month. The Fed’s comments indicating that recent global economic and financial developments may restrain economic activity somewhat also generated some negative sentiment.
New Zealand-based Dairy exporter Fonterra has cut 750 jobs as part of a restructuring to cut costs, adding to the negativity.
In other economic news, data from the Reserve Bank of New Zealand showed that the total credit card spending in New Zealand rose a seasonally adjusted 1.1 percent month-on-month in August, slower than the 1.7 percent climb in July. On an annual basis, credit card spending grew at a faster pace of 10.5 percent in August, following a 9.8 percent rise in the preceding month.
Last Friday, the Australian and the New Zealand dollars showed mixed performance against its major rivals. While the aussie and the kiwi rose against the U.S. dollar, they fell against the yen. Against the euro, the aussie held steady and the kiwi rose.
In the Asian trading, the Australian dollar fell to a 5-day low of 85.76 against the yen, from Friday’s closing value of 86.24. The aussie may test support near the 83.00 region.
The aussie edged down to 1.5791 against the euro, from last week’s closing value of 1.5695. On the downside, 1.62 is seen as the next support level for the aussie.
Against the U.S. and the Canadian dollars, the aussie dropped to 0.7162 and 0.9465 from Friday’s closing quotes of 0.7182 and 0.9503, respectively. If the aussie extends its downtrend, it is likely to find support around 0.70 against the greenback and 0.93 against the loonie.
Meanwhile, the aussie rose to 1.1278 against the NZ dollar, from Friday’s closing value of 1.1218. The aussie may test resistance near the 1.14 area.
The NZ dollar fell to 0.6367 against the U.S. dollar and 76.24 against the yen, from last week’s closing quotes of 0.6388 and 76.65, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.61 against the greenback and 72.00 against the yen.
Against the euro, the kiwi edged down to 1.7762 from Friday’s closing value of 1.7650. The kiwi may test support near the 1.86 region.
Meanwhile, the safe haven yen rose against most major currencies amid rising risk aversion.
The yen advanced to 186.02 against the pound, from Friday’s closing value of 186.20. The yen may test resistance near the 181.00 region.
Against the U.S. dollar, the yen edged up to 119.74 from last week’s closing quote of 119.94. The yen is likely to find resistance around the 115.00 area.
Moving away from an early low of 123.90 against the Swiss franc, the yen edged up to 123.63. On the upside, 122.00 is seen as the next resistance level for the yen.
Against the Canadian dollar, the yen climbed to 90.59 from Friday’s closing value of 90.69. This may be compared to an early 6-day high of 90.58. If the yen extends its uptrend, it is likely to find resistance around the 89.00 area.
Looking ahead, the German PPI for August is due to be released at 2:00 am ET.
In the New York session, Canada wholesales data for July and U.S. existing home sales data for August are slated for release.
At 8:45 am ET, European Central Bank board member Benoit Coeure will speak at a debate on “teaching economic policy” at a Rome university.
At 1:00 pm ET, Federal Reserve Bank of Atlanta President Dennis Lockhart is expected to speak at the Buckhead Rotary Club in Atlanta, U.S.
Subsequently, Bank of Canada Governor Stephen Poloz will deliver a speech about the commodity cycle and the Canadian economy, in Calgary, Canada at 2:30 pm ET.
The Japanese market will remain closed in observance of the ‘Respect-for-the-Aged Day’ holiday.
The material has been provided by InstaForex Company – www.instaforex.com