Australian Dollar Extends Fall

The Australian dollar extended its decline against its major rivals in the European session on Tuesday, as yields on Australian ten-year government bonds fell in reaction to China's regulation to prevent hoarding and speculation of iron ore transactions.

Iron ore prices fell amid tighter regulations imposed by the Chinese authorities to rein in speculation and hoarding.

Iron ore is a major export for Australia and Chinese regulation would have an impact on the economy.

Investors await testimony by Federal Reserve Chair Jerome Powell for more clues about the future path of monetary policy.

Although Powell acknowledged that the U.S. economy continues to show "sustained improvement" and predict a pickup in employment, other policy makers' diverging views have triggered a debate about an early tapering of the stimulus program.

The aussie dropped to a 4-1/2-month low of 1.5873 against the euro, from a high of 1.5794 seen at 7:30 pm ET. Next key support for the Australian currency is seen around the 1.62 region.

The aussie weakened to 0.7494 against the greenback and 82.79 against the yen, down from its previous high of 0.7545 and a 4-day high of 83.27, respectively. The next likely support for the aussie is seen around 0.72 against the greenback and 80.00 against the yen.

The Australian currency depreciated to near a 3-week low of 0.9283 against the loonie and a 5-day low of 1.0750 against the kiwi, following its early highs of 0.9330 and 1.0789, respectively. The aussie is likely to challenge support around 0.90 against the loonie and 1.06 against the kiwi.

Looking ahead, U.S. existing home sales for May will be published in the New York session.

At 10:00 am ET, Eurozone flash consumer sentiment index for June will be out.

At 2:00 pm ET, Federal Reserve Chair Jerome Powell testifies on the central bank's emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis, via satellite.