Australian, NZ Dollars Drop On Global Growth Concerns

The Australian and NZ dollars fell against their major counterparts in the Asian session on Wednesday, as rising cases of Delta variant of COVID-19 clouded the global economic outlook.

Australia's New South Wales reported 1,480 new coronavirus cases on Tuesday, up from 1,220 cases a day earlier.

The likelihood of a slowing reopening of the economy along with reduced policy support from the Federal Reserve and the European Central Bank added to worries.

In an interview with the Financial Times, St. Louis Federal Reserve Bank President James Bullard said that the central bank should proceed with a plan to wind down stimulus measures this year and end by the first half of next year.

Bullard said that there is enough demand for workers and more job openings, which could pave the way for a strong labor market next year.

The aussie weakened to 6-day lows of 0.7367 against the greenback, 81.21 against the yen and 1.6075 against the euro, down from its early highs of 0.7404, 81.65 and 1.6005, respectively. The aussie is likely to find support around 0.72 against the greenback, 78.00 against the yen and 1.62 against the euro.

The aussie reversed from an early high of 1.0410 against the kiwi, declining to 1.0386. On the downside, 1.01 is possibly seen as its next support level.

The aussie retreated to 0.9328 against the loonie, from a high of 0.9350 seen at 9:45 pm ET. If the aussie drops further, 0.92 is seen as its next support level.

The kiwi slipped to 78.15 against the yen, 1.6702 against the euro and a session's low of 0.7087 against the greenback, after rising to 78.45, 1.6654 and 0.7113, in early deals. The currency is poised to find support around 76.00 against the yen, 1.70 against the euro and 0.68 against the greenback.

Looking ahead, the Bank of Canada will announce its interest rate decision at 10:00 am ET. The BoC is widely expected to keep its policy rate steady at 0.25 percent.

Canada Ivey PMI for August and U.S. consumer credit for July will be featured in the New York session.