The Australian dollar declined against its major counterparts in the Asian session on Monday amid rising risk aversion, as most Asian shares fell, tracking the negative cues from Wall Street amid weak corporate earnings results and as investors shifted focus to key central bank meetings this week.
The Bank of Japan will convene for a two-day policy meeting today, with analysts expecting the central bank to discuss reducing investments in ETFs tracking the Nikkei 225 index.
The Federal Open Market Committee is widely expected to leave interest rates unchanged when it meets on Tuesday and Wednesday.
Traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.
The monthly U.S. jobs report as well as reports on pending home sales, personal income and spending, consumer confidence and manufacturing and service sector activity due this week may also offer further clues on the health of world’s largest economy.
The aussie dropped to 0.7386 against the greenback, from an early high of 0.7406, and held steady thereafter. The next possible support for the aussie is seen around the 0.72 level.
The aussie fell to 1.0866 against the kiwi, its lowest since July 24. If the aussie extends decline, 1.07 is possibly seen as its next support level.
The aussie dropped back to 1.5775 against the euro and held steady thereafter. At last week’s close, the pair was worth 1.5745.
Reversing from an early high of 0.9674 against the loonie, the aussie eased to 0.9656. On the downside, 0.95 is likely seen as its next support level.
Meanwhile, the aussie held steady against the yen, trading in the range of 82.23 to 82.05. The pair finished last week’s deals at 82.16.
Data from the Ministry of Economy, Trade and Industry showed that Japan retail sales recovered in June.
Retail sales climbed 1.5 percent month-on-month in June, reversing a 1.7 percent fall in May. The rate came in line with expectations.
Looking ahead, U.K. mortgage approvals for June and Eurozone economic confidence index for July are set for release in the European session.
At 8:00 am ET, German preliminary consumer inflation for July is due.
The U.S. pending home sales for June are scheduled for release in the New York session.