Australian Dollar Falls After RBA Bullock Comments And Tech Rout

(RTTNews) - The Australian dollar weakened against other major currencies in the European session on Tuesday, following the comments of the Reserve Bank of Australia (RBA) Governor Michele Bullock.

The RBA Governor Bullock said today that inflation is still too high and that it is not impossible for interest rates to rise further.

Speaking at a luncheon of money market participants the RBA Bullock said, "some further easing in the growth of demand is likely to be required if we're to bring inflation back down sustainably to target".

Renewed risk-off sentiment linked to a sell-off in chip stocks related to artificial intelligence and worries about Chinese semiconductor advancements, further weakened the Australian dollar.

However, traders may avoid making large wagers in advance of the important two-day FOMC policy meeting, which begins later today.

Meanwhile, U.S. President Donald Trump told Axios that he chose to suspend strikes on Iran in order to give negotiations another chance, stressing that he could order a return to expanded military operations if diplomacy fails.

Tehran also ceased retaliatory strikes against U.S. bases in neighboring countries while Kazakhstan resumed crude oil exports through the Caspian Pipeline Consortium terminal that had been disrupted by Ukrainian drone attacks.

Crude oil prices plummeted on Monday after the U.S. halted nearly two weeks of military attacks against Iran. West Texas Intermediate crude for September delivery was down $7.09 or 7.94 percent at $82.22 per barrel.

In the European trading today, the Australian dollar fell to 5-day lows of 0.6963 against the U.S. dollar and 114.02 against the yen, from early highs of 0.6997 and 114.57, respectively. If the aussie extends its downtrend, it is likely to find support around 0.68 against the greenback and 112.00 against the yen.

Against the euro and the Canadian dollar, the aussie dropped to 4-day lows of 1.6323 and 0.9833 from early highs of 1.6258 and 0.9879, respectively. The aussie may test support near 1.66 against the euro and 0.97 against the loonie.

The aussie edged down to 1.2072 against the NZ dollar, from an early near 3-week high of 1.2121. On the downside, 1.19 is seen as the next support level for the aussie.

Looking ahead, U.S. ADP employment data, U.S. goods trade balance for June, U.S. S&P/Case-Shiller home price for May, U.S. Consumer Board's consumer confidence for July, U.S. Richmond Fed manufacturing index for July and U.S. Dallas Fed services revenues index for July is slated for release in the New York session.