Aussie, Kiwi fall sharply versus dollar ahead of FOMC
Investors continued to sell both Aussie and Kiwi on Wednesday on expectations of further monetary easing by their central banks, and as investors left risky currencies on concerns Greece would default on its debt obligations.
RBA minutes for June policy meeting released on Tuesday stressed on the importance of having deeper declines in the currency to boost key sectors in the economy.
Weaker currency is “both likely and necessary,” RBA minutes said.
The selloff in the New Zealand dollar continued this week after the Reserve Bank of New Zealand decision to slash its interest rates and hinting of further monetary easing.
While a report released earlier today showed New Zealand’s trade deficit turned into surplus, eyes will focus on the country’s first-quarter GDP.
The AUDUSD fell to trade around 0.7673 where the bearish crossover between daily SMA 20 and SMA 50 helped to push the price lower.
The fall of the RSI 14 below the 50-center line has provided some momentum.
The NZDUSD fell to hit a low of 0.6917 after the breach of 127.2% Fibonacci extension support level, targeting the 161.8% Fibo. support located at 0.6820.
Although the Stochastic Oscillator points that the price is trading in oversold region, it still provides to no sign of a possible upside correction.
The Fed policy statement as well as Yellen’s comments about monetary policy will influence the dollar and thereby weigh on both Aussie and Kiwi.