Australian, NZ Dollars Drop On Disappointing China Trade Data

(RTTNews) - The Australian and NZ dollars declined against their major counterparts on Tuesday, as softer-than-expected trade data from China fuelled concerns about the economic growth.

China's exports fell by 14.5 percent in July from a year ago, while imports dropped by 12.4 percent in U.S. dollar terms amid falling demand overseas and in the country, official data showed earlier today.

Both exports and imports sank at their fastest pace since the 2020 COVID-19 pandemic, reinforcing the need for further stimulus measures from policymakers.

Moody's cut the credit ratings of 10 banks by one notch and warned of downgrading major lenders including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp.

Comments from Fed officials raised uncertainty about the monetary policy outlook. While Fed Governor Michele Bowman favoured more interest rate rises to control inflation, New York Fed President John Williams indicated that the central bank needs to keep the restrictive stance for some time.

The aussie weakened to more than a 2-month low of 0.6511 against the greenback, more than 3-year low of 1.6859 against the euro and a 2-day low of 0.8744 against the loonie, from its early highs of 0.6576, 1.6726 and 0.8792, respectively. The aussie is seen finding support around 0.62 against the greenback, 1.70 against the euro and 0.86 against the loonie.

The aussie declined to 93.12 against the yen, from an early 5-day high of 93.97. The currency is likely to face support around the 90.00 region, if it drops again.

The aussie fell back to 1.0751 against the kiwi, heading to pierce its previous 5-day low of 1.0751. The aussie is poised to find support around the 1.05 level.

The kiwi dropped to a 2-month low of 0.6048 against the greenback and more than a 3-year low of 1.8144 against the euro, down from its previous highs of 0.6109 and 1.8001, respectively. The next possible support for the kiwi is seen around 0.58 against the greenback and 1.86 against the euro.

The kiwi weakened to 86.52 against the yen, from an early 5-day high of 87.31. The kiwi may face support around the 83.00 level.

Looking ahead, U.S. and Canadian trade data and U.S. wholesale inventories for June will be published in the New York session.