Australian Dollar Falls Amid Risk Aversion On Falling Commodities

The Australian dollar declined against its major rivals in early European deals on Tuesday, as European shares declined amid falling commodity prices and tensions over North Korea, as well as nervousness ahead of the first round of French Presidential elections due Sunday.

The comments by U.S. Treasury Secretary Steven Mnuchin regarding the strength of the domestic currency sparked a rally in dollar, hurting commodities.

In an interview with the Financial Times, Mnuchin said that the dollar strength in the "longer run" is preferable, as it is a function of the confidence and the strength of the economy.

With the front-runners Marine Le Pen and Emmanuel Macron running neck-and-neck in the first round of French voting to be held on April 23, investors are cautious about the second round run-off vote due May 7.

North Korea has threatened to launch missile tests "every week" as U.S. Vice President Mike Pence arrived in Japan for talks expected to focus on trade and security issues.

The minutes from the Reserve Bank of Australia's April 4 meeting showed that members of the monetary policy board said that the country's economy is seeing moderate growth, supported by low interest rates.

Global growth as a whole appeared to be rising, the minutes added, in both developed and emerging economies.

The currency has been trading in a negative territory in the Asian session.

The aussie declined to 5-day lows of 0.7538 against the greenback and 1.4128 versus the euro, off its early highs of 0.7596 and 1.4004, respectively. The aussie is seen finding support around 0.73 against the greenback and 1.43 against the euro.

The aussie hit a 1-1/2-month low of 1.0743 versus the kiwi, from a high of 1.0832 hit at 8:00 pm ET. The next possible support for the aussie-kiwi pair is seen around the 1.05 region.

Pulling away from an early 11-day high of 1.0122 against the loonie, the aussie fell to a 5-day low of 1.0057. Continuation of the aussie's downtrend may see it challenging support around the 0.99 area.

The aussie eased to 82.05 versus the yen, from an early 1-week high of 82.95. On the downside, 80.00 is possibly seen as the next support level for the aussie-yen pair.

Moody's Investors Service said that the Japanese economy is showing evidence of incremental progress on reflation, after the government adopted a fiscal package last year and the central bank unveiled its yield curve control framework.

The agency said that somewhat stronger external demand has augmented the impact of these measures by the Japanese government and the Bank of Japan.

Looking ahead, U.S. housing starts, building permits and industrial production - all for March, as well as Canada existing home sales for the same month are due in the New York session.

At 9:00 am ET, Kansas City Fed President Esther George speaks before the Levy Economics Institute of Bard College's 26th Annual Minsky Conference.