RTTN:Australian Dollar Declines On Caution Ahead Of Greek Election
(RTTNews) - After showing choppy trading in the Asian session on Thursday, the Australian dollar dropped against other major currencies in early European deals as investors remained cautious ahead of the second round of Greek elections, which will take place this weekend.
Also, Italy will hold another key bond auction today, with the government aiming to raise between EUR 4 billion and EUR 6 billion by selling medium and longer-term bonds.
In yet another blow to Europe's efforts to contain the deepening debt crisis, Moody's Investors Service yesterday downgraded two euro area members, Spain and Cyprus, and placed their bond ratings on review for further possible downgrade.
Spanish government bond rating was lowered by three notches to 'Baa3' from 'A3,' reflecting increasing concerns that the government's decision to seek EUR100 billion financial support from EU will further increase the nation's debt burden. Cyprus's government bond ratings were cut by two notches to 'Ba3' from 'Ba1.'
The Australian dollar is trading at 2-day lows of 0.9924 against the U.S. dollar and 78.74 against the yen, compared to yesterday's close of 0.9941 and 79.0, respectively. The next downside target level for the aussie is seen at 78.5 against the yen and 0.990 against the greenback.
Against the New Zealand dollar, the Australian dollar is trading at a 2-day low of 1.2795 with 1.278 seen as the next downside target level. At yesterday's close, the aussie-kiwi pair was quoted at 1.2826.
Early in the day, the Reserve Bank of New Zealand decided to retain its benchmark interest rate at a record low of 2.5 percent.
The Australian dollar is trading at a 3-day low of 1.2660 against the euro and if the aussie weakens further, it may likely target the 1.270 level. The euro-aussie pair ended yesterday's trading at 1.2644.
Eurozone inflation slowed to a 15-month low in May as initially estimated, data from Eurostat showed. Annual inflation fell to 2.4 percent from 2.6 percent in April. Nonetheless, inflation continues to stay above the European Central Bank's 'below, but close to 2 percent' target.
On a monthly basis, consumer prices were down 0.1 percent in May. At the same time, core inflation that excludes food, alcohol, tobacco prices, remained unchanged at 1.6 percent annually in May.
The Australian dollar is worth 1.0213 against the Canadian dollar, down from yesterday's close of 1.0240. The near term support level for the aussie-loonie pair is seen at 1.018.
Looking ahead, the U.S. CPI for May and the weekly jobless claims for the week ended June 09 are slated for release in the New York morning session.
