SYDNEY: The Australian and New Zealand dollars skidded again on Wednesday, weighed down by worries about US tariffs and policy stimulus from China that failed to impress, after a short-lived rally a day earlier.
The Aussie fell 0.5% to $0.6240, having risen 0.8% overnight to as high as $0.6272.
Resistance was at the 21-day moving average of 63 cents, while support lies at Tuesday’s low of $0.6187 and the February low of $0.6085.
The kiwi was similarly down 0.4% to $0.5646, after rallying 0.9% overnight to as far as $0.5665. It reacted little to the announcement of the shock departure of Reserve Bank of New Zealand Governor Adrian Orr.
The Antipodean currencies had taken a hit after US President Donald Trump’s planned tariffs took effect on Tuesday, but ultimately settled higher as a jump in the euro to four-month highs has also helped to constrain the US dollar.
Comments from US Commerce Secretary Howard Lutnick that Trump would reach a middle ground with Canada and Mexico on tariffs offered some aid, but Trump in his address to Congress kept talking up tariffs as usual.
“The risk is still that we are not over the worst as far as the impact of Trump’s trade policy, so the Aussie will continue to be buffeted by that,” said Ray Attrill, head of FX strategy at the National Australia Bank.
“It is really difficult to say whether or not the low we saw towards the beginning of February when we were down below 61 cents is the low point for the Aussie.”
Beijing also kept its economic growth target for this year unchanged at roughly 5% while committing more fiscal resources to mitigate the impact of rising US tariffs, a result that was largely expected.
Australia, NZ dollars try to find footing amid US trade war tremors
The offshore yuan edged lower. Local data showed Australia’s economy expanded at the fastest pace in two years in the December quarter.
The 0.6% quarterly expansion was slightly higher than consensus, but it had been somewhat priced in after partial data flagged some upside risks.
Swaps imply a 73% probability of another rate cut in May from the Reserve Bank of Australia, while rates are seen reaching 3.5% by year-end.
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