Antipodean Currencies Fall Amid Risk-0ff Mood

(RTTNews) - The antipodean currencies such as the Australia and the New Zealand dollars weakened against other major currencies in the European session on Friday, as European shares dipped from record high amid uncertainty over the outlook for the AI trade and growing expectations for a Federal Reserve rate hike in December.

Brent crude futures traded above $96 a barrel, rekindling inflation concerns.

Middle East supply risks moved back into focus after Iranian officials reported an attack on Sirik in Hormozgan province amid conflict with the U.S.

Four oil tankers were hit by explosions in the Strait of Hormuz after the vessels had ignored warnings and entered what Iran's military considers restricted areas of the strategic waterway.

Iran's Revolutionary Guards claimed they targeted a U.S. early-warning radar in Bahrain in response to attacks on Iranian telecom tower in southern Hormozgan province.

Meanwhile, U.S. President Donald Trump downplayed the prospects of a comprehensive diplomatic solution with Iran, halted the negotiation process that Vice President Vance was advancing, and instead accepted a stalemate characterized by "no war, no talks."

Trump also indicated he may use military force against Iran if U.S. allies and ships are threatened.

German wholesale prices increased at the fastest pace in more than three years in October due to elevated energy prices, data released by Destatis showed.

Wholesale prices climbed 8.8 percent on a yearly basis in October, marking the strongest rise since February 2023. This followed September's 8.7 percent increase.

Markets anticipate that the Reserve Bank of Australia's (RBA) interest rate cycle has ended, also led to downside of AUD.

The 10-year US Treasury Yields hold onto three-week high near $5.13%. Yields on 10-year US bonds have jumped almost 5.5% in the past two trading days.

A tighter monetary policy stance was priced in by traders due to hawkish remarks made by a number of Federal Reserve (Fed) officials against the backdrop of higher-than-expected US consumer inflation numbers for October.

In actuality, traders are projecting a 13% likelihood of a gigantic 50-bps boost next month, and a 25-basis-point (bps) rate increase in December is entirely priced in.

In the European trading today, the Australian dollar fell to a 10-month low of 0.6815 against the U.S. dollar, a 2-day low of 1.2251 against the NZ dollar and a 1-1/2-month low of 1.6229 against the euro, from early highs of 0.6807, 1.2292 and 1.6302, respectively. If the aussie extends its downtrend, it is likely to find support around 0.66 against the greenback, 1.20 against the kiwi and 1.64 against the euro.

Against the yen and the Canadian dollar, the aussie slid to 1-week lows of 108.40 and 0.9675 from early highs of 108.97 and 0.9714, respectively. On the downside, 107.00 against the yen and 0.95 against the loonie are seen as the next support levels for the aussie.

The NZ dollar fell to a 1-week low of 0.5530 against the U.S. dollar, from an early high of 0.5548. The kiwi is likely to find support around the 0.53 region.

Against the yen and the euro, the kiwi slid to 4-day lows of 88.43 and 1.9987 from early highs of 88.75 and 1.9930, respectively. The kiwi may test support near 86.00 against the yen and 2.03 against the euro.

Looking ahead, Canada manufacturing sales and wholesale sales data for September, U.S. PPI for October and U.S. Baker Hughes oil rig count data are slated for release in the New York session.