Australian Dollar Slides On Risk Aversion

The Australian dollar weakened against its major counterparts in the Asian session on Monday, as expectations of an aggressive interest rate cut by the U.S. Federal Reserve reduced and Middle East tensions intensified, diminishing the appeal of high-yielding assets.

Hopes for a smaller cut increased after a Wall Street Journal report that Fed officials are unlikely to take bolder now and may pursue further cuts in the future given slowing global growth and trade uncertainty.

Geopolitical tensions remained after a British-flagged tanker was seized by Iran in the Gulf.

Traders await reports on new and existing home sales, durable goods orders and second quarter GDP this week for clues on the health of the world's largest economy.

The aussie declined to a 4-day low of 0.7031 against the greenback from Friday's closing value of 0.7039. The next possible support for the aussie is seen around the 0.69 level.

The aussie that ended last week's trading at 1.5920 against the euro weakened to 1.5948. The aussie is seen finding support around the 1.625 region.

The aussie depreciated to 1.0386 against the kiwi for the first time since March 27. On the downside, 1.02 is possibly seen as the next support level for the aussie.

The Australian currency fell to a 4-day low of 0.9186 against the loonie, down from Friday's closing quote of 0.9195. If the aussie extends decline, 0.90 is possibly seen as its next support level.

The aussie pared gains to 75.93 against the yen, from a high of 76.07 hit at 9:30 pm ET. The aussie is likely to find support around the 74.00 area.

Looking ahead, Canada wholesale sales for May are due at 8:30 am ET.