SYDNEY]The Australian dollar fell to four-month lows on Thursday, while the New Zealand dollar was vulnerable after the Federal Reserve remained upbeat on economic growth, setting a fire under the US dollar.
The Australian dollar skidded to US$0.7408, its lowest since mid-January, having dropped around a US cent and a half on Wednesday. It has lost 1 per cent so far this week, largely due to a shakeout in Aussie long positions.
“A break of the US$0.7400 level will send the Aussie longs running for the exit and could add more fuel to the downside momentum,” said Stephen Innes, a senior trader at OANDA.
The next level of support was found at US$0.7385, the 61.8 per cent retracement of the January-February move.
Much of the Aussie weakness came after the Fed made positive comments on the job market, reinforcing expectations of a rate hike in June.
Also undermining the Aussie was a sharp 6.5 per cent fall in iron ore on Wednesday. Iron ore is Australia’s top export earner.
Markets found little comfort from a lower-than-expected Australian trade surplus, which slowed to A$3.1 billion in March from A$3.6 billion in February.
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