Australia, NZ dollars struggle as risk assets retreat
- The Aussie was flat at $0.6682, after moving little overnight
SYDNEY: The Australian and New Zealand dollars struggled on Thursday as a sell-off in global equities and a bounce in the Japanese yen amid heightened geopolitical risks left both currencies pinned near key support levels.
The Aussie was flat at $0.6682, after moving little overnight.
Major support is seen at $0.6662, with resistance plentiful at $0.6727 and the recent 15-month high of $0.6766.
The kiwi dollar slipped 0.1% to $0.5741, after edging up 0.2% overnight.
Support lies at $0.5712, with resistance at $0.5810.
Overnight, Wall Street fell, Treasuries gained and precious metals such as gold and silver hit new records as traders digested a flurry of geopolitical headlines.
US President Donald Trump softened warnings about striking Iran over its crackdown on civil unrest, but Washington is withdrawing some personnel from bases in the Middle East as Iran warned neighbours it would hit American bases if the US attacks.
Tony Sycamore, an analyst at IG, said if the Australian dollar breaks the key support level of around $0.6660, it would suggest the currency has already peaked around $0.6766 in the near term.
“Looking ahead, whether AUD/USD extends its correction from the 0.6766 peak this week will depend on risk sentiment over the coming days.”
The battered Japanese yen bounced 0.5% overnight amid safe-haven flows, having weakened towards the key 160 level on speculation of a potential snap election from Prime Minister Sanae Takaichi, which could pave the way for fiscal stimulus.
That saw the two Antipodean currencies retreat from recent multi-month peaks versus the yen. The Aussie last traded at 105.72 yen, having fallen 0.4% overnight to move away from an 18-month peak of 106.71.
The kiwi slipped 0.1% to 90.96 yen, extending a 0.2% drop overnight to fall further away from a 14-month top of 91.79.
In New Zealand, the new central bank chief Anna Breman is facing some backlash from the government for signing a statement alongside other global central bank chiefs in support of Federal Reserve Chair Jerome Powell.
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