Australian, NZ Dollars Drop On Risk Aversion

The Australian and NZ dollars fell against their major counterparts in the Asian session on Thursday, as rising coronavirus cases heightened concerns about the the global economic recovery.

Asian stocks followed Wall Street lower as indications of an economic slowdown in Europe and the U.S. renewed fears about the downturn caused by the pandemic.

Concerns over U.S. fiscal stimulus also weighed on markets.

Federal Reserve Chair Jerome Powell noted that despite progress in rebounding from the coronavirus economic downturn, "there is a long way to go."

Several Fed officials on Wednesday called for more fiscal stimulus to boost the economy.

The aussie weakened to more than a 2-month low of 0.7031 versus the greenback and a 2-1/2-month low of 74.08 against the yen, off its early highs of 0.7081 and 74.63, respectively. The next possible support for the aussie is seen around 0.68 versus the greenback and 70.00 against the yen.

Reversing from its early highs of 1.6457 versus the euro and 0.9472 against the loonie, the aussie dropped to a 3-1/2-month low of 1.6576 and more than a 4-week low of 0.9428, respectively. The aussie is likely to find support around 1.70 versus the euro and 0.92 against the loonie.

The aussie pared gains to 1.0774 against the kiwi, from a high of 1.0806 seen at 7:10 pm ET. On the downside, 1.05 is possibly seen as its next support level.

The kiwi depreciated to more than a 4-week low of 0.6524 versus the greenback, near 3-month low of 68.75 against the yen and a 4-week low of 1.7865 versus the euro, from its early highs of 0.6557, 69.10 and 1.7771, respectively. The kiwi is poised to find support around 0.62 versus the greenback, 65 against the yen and 1.81 versus the euro.

Looking ahead, the Swiss National Bank's monetary policy announcement will be out at 3:30 am ET. Economists widely expect the central bank to maintain policy rate at -0.75 percent.

German Ifo business sentiment index for September is due in the European session.

U.S. weekly jobless claims for the week ended September 19 and new home sales for August are scheduled for release in the New York session.