Home / Forex Analysis / Australian Dollar Drops On Tariff Worries

Australian Dollar Drops On Tariff Worries

The Australian dollar declined against its major counterparts in the European session on Tuesday amid risk aversion, as investors awaited the Dec. 15 deadline for the next round of U.S. tariffs on Chinese imports.

Washington is due to impose new tariff hikes on $160 billion of Chinese goods if the two sides fail to reach an accord.

China’s assistant minister of commerce Ren Hongbin said Beijing is hoping negotiations can conclude on a trade deal before the new tariffs kick in this weekend.

Markets also await meetings by the Federal Reserve and the European Central Bank as well as the outcome of Britain’s snap election Thursday for directional cues.

A two-day meeting of the Federal Reserve ends on Wednesday, with economists expecting no change in economic forecasts and the interest rate outlook.

Data from the Australian Bureau of Statistics showed that Australia house prices rose 2.4 percent on quarter in the third quarter of 2019.

That beat expectations for an increase of 1.5 percent following the 0.7 percent decline in the second quarter.

Survey data from National Australia Bank showed that Australia’s business confidence declined in November, unwinding the increase seen in previous month, while business conditions remained unchanged.

The business confidence index dropped two points to zero in November suggesting that on average firms see no change in business conditions going forward.

The currency traded mixed against its major counterparts in the previous session. While it rose against the yen, it was steady against the greenback and the euro. Against the kiwi, it dropped.

The aussie declined to a 5-day low of 1.6259 against the euro, from a high of 1.6192 seen at 9:15 pm ET. The next possible support for the aussie is seen around the 1.65 level.

Having climbed to 0.6837 against the greenback at 9:15 pm ET, the aussie reversed direction, touching an 8-day low of 0.6811. If the aussie slides further, 0.67 is likely seen as its next support level.

The aussie fell to a 6-day low of 73.94 against the yen, after rising as high as 74.28 at 9:15 pm ET. The aussie is seen locating support around the 72.5 region.

The aussie depreciated to a 4-day low of 0.9019 against the loonie, from a high of 0.9046 it recorded at 9:15 pm ET. On the downside, 0.89 is possibly seen as the next support level for the aussie.

In contrast, the aussie held steady against the kiwi, following more than a 4-month low of 1.0398 seen at 2:15 am ET. This may be compared to a 4-day high of 1.0431 it logged in the Asian session. At yesterday’s close, the pair was worth 1.0419.

The material has been provided by InstaForex Company – www.instaforex.com