Currencies of Australia and New Zealand weakened against their major counterparts in the Asian session on Thursday, as investor sentiment fell amid renewed concerns about the outlook for interest rates after the U.S. Fed signaled on keeping interest rates at an elevated level through 2024 after one more rate hike this year, despite the decision to hold interest rates steady this month.
The forecast for rates at the end of 2024 was raised to 5.1 percent from 4.6 percent in June, while the outlook at the end of 2025 was increased to 3.9 percent from 3.4 percent.
The Fed's next monetary policy meeting is scheduled for October 31- November 1, with CME Group's FedWatch Tool currently indicating a 73.6 percent chance rates will remain unchanged and a 26.4 percent chance of a quarter point rate increase.
The focus has now shifted to policy meetings of the Bank of England and Bank of Japan later in the day, as well as the Swiss National Bank on Friday.
Meanwhile, the NZ dollar rose slightly against its major rivals after the New Zealand GDP data but fell thereafter.
Data from Statistics New Zealand showed that the New Zealand's economy grew 0.9 percent in the second quarter, following a revised 0.0 percent in the first quarter. The economists expected a rise of 0.5 percent in the June quarter.
In the Asian trading today, the Australian dollar fell to a 5-week low of 0.8639 against the Canadian dollar and an 8-day low of 0.6403 against the U.S. dollar from yesterday's closing quotes of 0.8675 and 0.6445, respectively. If the aussie extends its downtrend, it could find support around 0.85 against the loonie and 0.65 against the greenback.
Against the euro and the yen, the aussie slipped to 2-day lows of 1.6608 and 94.94 from yesterday's closing quotes of 1.6533 and 95.60, respectively. The aussie may test support near 1.68 against the euro and 93.00 against the yen.
The aussie edged down to 1.0842 against the NZ dollar, from Wednesday's closing value of 1.0870. On the downside, 1.06 is seen as the next support level for the aussie.
The NZ dollar fell to a 3-day low of 0.5903 against the U.S. dollar and a 2-day low of 87.52 against the yen, from yesterday's closing quotes of 0.5928 and 87.93, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.57 against the greenback and 85.00 against the yen.
Against the euro, the kiwi edged down to 1.8016 from yesterday's closing value of 1.7978. On the downside, 1.84 is seen as the next support level.
Meanwhile, the safe-haven currencies such as the U.S. dollar and the yen rose after the U.S. Fed rate decision.
The U.S. dollar rose to more than a 6-month high of 1.0617 against the euro and more than a 5-1/2-month high of 1.2304 against the pound from yesterday's closing quotes of 1.0659 and 1.2344, respectively. If the greenback extends its uptrend, it may find resistance around 1.04 against the euro and 1.19 against the pound.
Against the yen, the Swiss franc and the Canadian dollar, the greenback advanced to a 10-month high of 148.46, nearly a 3-month high of 0.9010 against the Swiss franc and a 3-day high of 1.3501 against the Canadian dollar from yesterday's closing quotes of 148.33, 0.8984 and 1.3460, respectively. The greenback may face support around 152.00 against the yen, 0.92 against the franc and 1.37 against the loonie.
The yen rose to a 3-day high of 157.37 against the euro and nearly a 1-1/2-month high of 182.39 against the pound, from yesterday's closing quotes of 158.10 and 183.10, respectively. If the yen extends its uptrend, it may resist around 151.00 against the euro and 176.00 against the pound.
Against the Swiss franc and the Canadian dollar, the yen edged down to 164.53 and 109.81 from yesterday's closing quotes of 165.03 and 110.17, respectively. On the upside, 163.00 against the franc and 107.00 against the loonie are seen as the next support levels for the yen.
Looking ahead, the Bank of England will announce its rate decision at 7:00 am ET. Markets expect policymakers to lift the bank rate to 5.50 percent in a three-way split vote.
In the New York session, Canada new housing price index for August, U.S. weekly jobless claims, current account data for the second quarter, U.S. Consumer Board's leading index for August and U.S. existing home sales data for August are slated for release.
