Australian Dollar Declines On Risk Aversion

The Australian dollar slipped against its major opponents on Tuesday's European deals, as European stocks declined on continued worries over Greece debt default and heightened political uncertainty in Spain following local elections on Sunday.

Greece's government on Monday ruled out imposing controls over capital flows after an opposition lawmaker suggested the move if the country fails to strike a deal with its creditors soon. Gabriel Sakellaridis, the spokesman for the Greek government, reportedly said that the speculation of imposing capital controls was "unfounded and malicious".

Meanwhile, Klaus Regling, the head of the European Stability Mechanism, told Germany's Bild newspaper on Tuesday that without an agreement on reforms with creditors, Greece will not get any new loans.

Spanish Prime Minister Mariano Rajoy's Popular Party suffered its worst result in 20 years in a municipal election, as the voters punished his government for four years of austerity and a raft of corruption scandals before a general election due in November.

The currency was steady against its major rivals, except the NZ dollar, on Monday.

In the Asian session, the aussie was higher, as most Asian bourses were up following the Chinese government's decision to open an array of infrastructure projects to private investment, while slashing taxes on imported clothing and other consumer goods.

The aussie declined to near a 5-week low of 0.7771 against the greenback and near a 2-week low of 0.9593 against the loone, from an early high of 0.7839 and a 4-day high of 0.9647,respectively. The next possible support for the aussie may be located around 0.76 against the greenback and 0.955 against the loonie.

The aussie eased to 95.29 against the yen and 1.4018 against the euro, after having advanced to a 4-day high of 95.73 and a 12-day high of 1.3949, respectively in previous deals. Continuation of downtrend may lead the aussie to support levels of around 94.00 against the yen and 1.42 against the euro.

The Australian currency pared gains to 1.0689 against the kiwi, off an early high of 1.0718. The aussie is seen finding support around the 1.05 mark.

Looking ahead, U.S. durable goods orders for April, U.S. S&P Case-Shiller's house price index for March, the Conference Board's U.S. consumer confidence index for May and new home sales data for April are due to be released in the New York session.

At 12:30 pm ET, Federal Reserve Governor Stanley Fischer is expected to speak on "The Federal Reserve and the Global Economy" before a conference in honor of Professor Haim Ben-Shaharat at the Tel Aviv University in Israel.