Antipodean Currencies Fall Amid Rising Risk Aversion

Antipodean currencies such as the Australian and the New Zealand dollars weakened against their major counterparts in the Asian session on Wednesday, as investors turned more risk averse due to mounting geopolitical tensions.

North Korea warned of ‘catastrophic consequences’ to the U.S. government’s ‘outrageous actions’ to deploy a navy strike group to the Korean Peninsula. The hermit state said its “nuclear sight was focused on the U.S. invasionary bases.”

U.S. President Donald Trump has vowed that the U.S. will single-handedly handle the nuclear threat from North Korea if China is not going to solve it.

Meanwhile, the Antipodean currencies showed muted reaction to the recent China data.

Data from the National Bureau of Statistics showed that the consumer prices in China were up 0.9 percent on year in March. That was shy of expectations for 1.0 percent, but it was still up from 0.8 percent in February. On a monthly basis, consumer prices slipped 0.3 percent after falling 0.2 percent in the previous month.

Producer prices jumped an annual 7.6 percent in March, exceeding expectations for 7.5 percent but down from 7.8 percent in the three months prior.

On the economic front, the latest survey from Westpac Bank revealed that consumer confidence in Australia slipped slightly in April, easing 0.7 percent to a score of 99.0. That follows the 0.1 percent increase in March to 99.7.

Tuesday, the Australian and the New Zealand dollars showed mixed trading against their major counterparts. While the aussie and the kiwi rose against the U.S. dollar, they fell against the yen and the euro.

In the Asian trading, the Australian dollar fell to nearly a 5-month low of 81.89 against the yen, from yesterday’s closing value of 82.18. The aussie may test support near the 80.00 region.

Against the euro, the aussie dropped to 1.4170 from yesterday’s closing value of 1.4144. On the downside, 1.44 is seen as the next support level for the aussie.

Against the U.S. and the Canadian dollars, the aussie slipped to 0.7484 and 0.9980 from yesterday’s closing quotes of 0.7498 and 0.9990, respectively. If the aussie extends its downtrend, it is likely to find support around 0.73 against the greenback and 0.98 against the loonie.

The NZ dollar fell to nearly a 5-month low of 75.89 against the yen, from yesterday’s closing value of 76.23. The kiwi is likely to find support around the 74.00 region.

The kiwi dropped to 1.5291 against the euro, from yesterday’s closing value of 1.5243. On the downside, 1.54 is seen as the next support level for the kiwi.

Against the U.S. and the Australian dollars, the kiwi edged down to 0.6933 and 1.0799 from yesterday’s closing quotes of 0.6957 and 1.0771, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.67 against the greenback and 1.09 against the aussie.

Meanwhile, the safe-haven yen rose against its major rivals amid rising risk aversion.

On the economic front, the Cabinet Office said that core machine…

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