Forex News: Antipodean Currencies As European Shares Decline On Trade

Antipodean Currencies As European Shares Decline On Trade Deal Anxiety

(RTTNews) - The antipodean currencies such as the Australia and New Zealand dollars weakened against their major currencies in the European session on Tuesday, as European shares traded lower, with disappointing earnings and trade anxiety keeping investors on edge.

Media reports suggest that the European Union is preparing to respond with a suite of retaliatory measures under its Anti-Coercion Instrument (ACI) following U.S. President Donald Trump's threat to impose a 30 percent tariff on EU goods from 1 August.

Elsewhere, the prospect of an interim trade deal between the U.S. and India before the August 1 deadline have dimmed due to persistent disagreements over key agricultural and dairy products.

In economic news, the minutes of the July monetary policy meeting showed that the Reserve Bank of Australia's policymakers said cutting the interest rate for a third straight time within the gap of four meetings would be inconsistent with the cautious monetary policy stance.

"Lowering the cash rate a third time within the space of four meetings would be unlikely to be consistent with the strategy of easing monetary policy in a cautious and gradual manner to achieve the Board's objective," the minutes said.

Markets widely expected the RBA to cut the cash rate by a quarter-point on July 8. But with a majority of 8-3, the board voted to hold the rate at 3.85 percent.

Data from Statistics New Zealand showed that the New Zealand posted a seasonally adjusted merchandise trade surplus of NZ$142 million in June. That was well shy of expectations for a surplus of NZ$1.020 billion following the downwardly revised NZ$1.082 billion surplus in May.

Exports were up 10 percent on year to NZ$6.63 billion following the downwardly revised NZ$7.50 billion in the previous month. Imports jumped an annual 19 percent to NZ$6.49 billion, up from the downwardly revised NZ$6.42 billion a month earlier.

In the European trading today, the Australian dollar fell to nearly a 2-week low of 1.7969 against the euro and a 5-day low of 0.8905 against the Canadian dollar, from early highs of 1.7906 and 0.8930, respectively. If the aussie extends its downtrend, it is likely to find support around 1.81 against the euro and 0.88 against the loonie.

Against the U.S. dollar and the yen, the aussie slipped to 0.6504 and 96.05 from early highs of 0.6528 and 96.38, respectively. On the downside, 0.66 against the greenback and 94.00 against the yen.

The NZ dollar fell to nearly a 3-1/2-month low of 1.9676 against the euro and a 6-day low of 87.72 against the yen, from early highs of 1.9587 and 88.09, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.98 against the euro and 86.00 against the yen.

Against the Australia and the U.S. dollars, the kiwi edged down to 1.0958 and 0.5941 from early highs of 1.0930 and 0.5970, respectively. The kiwi may test support near 1.10 against the aussie and 0.58 against the greenback.

Looking ahead, U.S. Redbook report and U.S. Richmond Fed manufacturing index for July are slated for release in the New York session.

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