Australian Dollar Drops Amid Risk Aversion

The Australian dollar weakened against its major counterparts in the Asian session on Thursday, as Asian stock markets fell following the negative cues from Wall Street after the Fed minutes expressed concerns about a rebound in economic growth from the virus outbreak.

The minutes of the Fed's July meeting noted that the coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world.

The Fed noted economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year.

"The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term," the Fed said.

The aussie fell to a 3-day low of 0.7161 against the greenback and an 8-day low of 75.99 against the yen, off its early highs of 0.7193 and 76.31, respectively. The next possible support for the aussie is seen around 0.68 against the greenback and 72.5 against the yen.

Reversing from its early highs of 1.6469 against the euro and 0.9502 against the loonie, the aussie depreciated to a 2-day low of 1.6530 and a 6-day low of 0.9472, respectively. The aussie is seen finding support around 1.70 against the euro and 0.93 against the loonie.

The aussie edged lower to 1.0933 against the kiwi, after rising to 1.0961 in early deals. The aussie is poised to challenge support around the 1.06 mark.

Looking ahead, Eurozone construction output for June is due out in the European session.

At 7:30 am ET, the European Central Bank releases the account of the monetary policy meeting of the Governing Council held on July 15-16.

The U.S. weekly jobless claims for the week ended August 15 and leading index for July are set for release in the New York session.