2023.01.3108:41:00UTC+00Australian Dollar Declines As European Shares Drop Ahead Of Fed Meeting

The Australian dollar fell against its major counterparts on Tuesday, as investors became cautious ahead of key central bank meetings, including the Federal Reserve.

The Fed begins its two-day meeting today and will announce the policy decision on Wednesday.

Economists expect that the central bank will raise rates by 25 basis points to a range of 4.50 percent to 4.75 percent.

The European Central Bank and the Bank of England are expected to raise interest rates by 50 basis points at their monetary policy meetings on Thursday.

Oil prices fell on concerns that further interest rate increases by major central banks could lead to a slowdown in global growth.

The aussie depreciated to 1-week lows of 0.7013 against the greenback and 91.35 against the yen, from its early highs of 0.7065 and 92.13, respectively. The next possible support for the aussie is seen around 0.68 against the greenback and 87.00 against the yen.

The aussie weakened to 6-day lows of 1.5438 against the euro and 0.9421 against the loonie, off its early highs of 1.5352 and 0.9454, respectively. The aussie is seen finding support around 1.57 against the euro and 0.92 against the loonie.

The aussie retreated to 1.0886 against the kiwi, heading to pierce its Asian session's 6-day low of 1.0885. If the aussie slides further, 1.06 is likely seen as its next support level.

Looking ahead, Eurozone GDP data for the fourth quarter is due in the European session.

Canada GDP data for November, as well as U.S. consumer confidence index for January and FHFA's house price index and S&P/Case-Shiller home price index for November will be featured in the New York session.