Forex News: Australian Dollar Falls Amid Risk-off Mood

Australian Dollar Falls Amid Risk-off Mood

(RTTNews) - The Australian dollar weakened against other major currencies in the Asian session on Wednesday, as Asian stock markets traded lower, with South Korea and Japan leading the losses amid a broad selloff in semiconductor stocks. Ongoing geopolitical tensions in the Middle East also kept crude oil prices higher and raised global inflation concerns. Bond yields also spiked to the highest levels in nearly two decades.

U.S. President Donald Trump said there are currently no U.S.-Iran peace talks taking place or scheduled. With both the U.S. and Iran asserting control over Strait of Hormuz, shipping traffic has fallen drastically, rekindling crude oil supply concerns.

Deputy Governor Andrew Hauser of the Reserve Bank of Australia (RBA) stressed on Wednesday that inflation is still too high. According to Hauser, monetary policy must aim to lower economic demand and ease pricing pressures. The central bank is observing a broad slowdown and is nonetheless very concerned about inflationary upside risks, even though it is not expecting a recession. Hauser cautioned that the RBA will be forced to hike interest rates once again if inflation does not decline.

In the Asian trading today, the Australian dollar fell to 8-day lows of 1.6392 against the euro and 0.9810 against the Canadian dollar, from yesterday's closing quotes of 1.6348 and 0.9842, respectively. If the aussie extends its downtrend, it is likely to find support around 1.65 against the euro and 0.97 against the loonie.

Against the U.S. dollar and the yen, the aussie slid to 5-day lows of 0.7067 and 112.57 from Tuesday's closing quotes of 0.7082 and 112.98, respectively. The aussie may test support near 0.69 against the greenback and 110.00 against the yen.

The aussie edged down to 1.2041 against the NZ dollar, from yesterday's closing value of 1.2058. On the downside, 1.19 is seen as the next support region.

Looking ahead, Eurozone CPI data for July is due to be released in the European session at 5:00 am ET.

In the New York session, U.S. MBA mortgage approvals data, U.S. EIA crude oil data are slated for release.

At 2:00 am ET, U.S. Federal Reserve's FOMC minutes of its latest monetary policy meeting is scheduled to be released.

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