Australian Dollar Falls Amid Rising Risk Aversion On Global Growth Fears

The Australian dollar drifted lower against its major counterparts in the Asian session on Tuesday amid rising risk aversion, as the International Monetary Fund's downgrade for global economic growth stoked fears about global outlook.

In its World Economic Outlook, the IMF slashed the global growth forecast for this year and next and warned that escalating trade tensions remains as a key source of risk to the outlook.

The lender projected global economic growth of 3.5 percent in 2019 and 3.6 percent in 2020, down from October forecasts of 3.3 percent and 3.5 percent, respectively.

Optimism over U.S.-China talks eased after a media report that there was lack of progress in discussions on structural issues such as intellectual property.

The aussie dropped to 0.7134 against the greenback, its lowest level since January 9. On the downside, 0.70 is likely seen as the next support for the aussie.

The aussie that closed yesterday's deals at 78.49 against the yen fell to a 5-day low of 78.05. The aussie is likely challenge support around the 77.00 level.

The aussie weakened to a weekly low of 1.5926 against the euro, compared to 1.5876 hit late New York Monday. If the aussie falls further, 1.61 is possibly seen as its next support level.

The Australian currency edged down to 1.0607 against the kiwi and 0.9495 against the loonie, from its early high of 1.0645 and a session's high of 0.9522, respectively. The next possible support for the aussie is seen around 1.04 against the kiwi and 0.93 against the loonie.

Looking ahead, U.K. ILO jobless rate for November and public sector finance data for December, as well as German ZEW economic sentiment index for January are due in the European session.

In the New York session, Canada wholesale sales for November and U.S. existing home sales for December are scheduled for release.