Australian, NZ Dollars Lower As Virus, U.S.-China Tensions Mount

The Australian and NZ dollars fell against their major counterparts in the Asian session on Tuesday, as rising U.S.-China tensions and the reimposition of coronavirus restrictions in California send Asian equities lower.

California Governor Gavin Newsom rolled back reopening, ordering to close bars, restaurants and movie theatres following a recent spike in coronavirus cases.

The measures followed fresh restrictions imposed in Texas, Arizona, Florida and other major states.

U.S.-China tensions renewed after the White House has rejected China's expansive claims in the South China Sea.

Survey data from National Australia Bank showed that Australia's business confidence and conditions rebounded in June.

The business confidence index rose 21 points to 1 from -20 in May.

The aussie declined to a 2-week low of 1.6373 against the euro, 4-day lows of 0.6926 against the greenback and 0.9432 against the loonie, from its early highs of 1.6315, 0.6954 and 0.9465, respectively. The aussie is likely to challenge support around 1.65 against the euro, 0.68 against the greenback and 0.92 against the loonie.

The aussie edged down to 74.29 against the yen, from a high of 74.62 seen earlier in the session. The aussie may test support around the 72.00 region, if it falls again.

The kiwi dropped to 1-week lows of 0.6525 against the greenback and 1.0638 against the aussie, after rising to 0.6544 and 1.0605, respectively in early deals. The kiwi is seen finding support around 0.64 against the greenback and 1.09 against the aussie.

Reversing from its early highs of 70.21 against the yen and 1.7334 against the euro, the kiwi depreciated to near 2-week lows of 69.93 and 1.7383, respectively. The next possible support for the kiwi is seen around 67 against the yen and 1.78 against the euro.

Looking ahead, German ZEW economic sentiment index for July and Eurozone industrial production for May are due in the European session.

U.S. CPI for June is set for release in the New York session.