SYDNEY: The Australian dollar hit a seven-month low on Thursday as a resurgent greenback threatened to push the Aussie through a key support level and extend its slide, while the kiwi hovered near a 19-month trough.
The Aussie slipped 0.1% to $0.6838, its weakest since March, after losing 0.3% on Wednesday. It is now perched above support at $0.6834 and a decisive break could take it to levels last seen in January.
The kiwi dollar was steady at $0.5569 after tumbling 0.8% on Wednesday, leaving it within striking distance of a 19-month low of $0.5529. Near-term resistance is around $0.5650.
The Aussie is feeling some added weight from the broad selloff in stocks on Thursday as Nvidia's board was meeting late on Wednesday to decide whether to oust CEO Jensen Huang. Nvidia shares slid 8% in after-hours trading.
"Momentum has turned towards the downside," said Imre Speizer, a strategist at Westpac. "The RBA’s more cautious stance and market pricing signalling a possible cycle end will weigh near term."
"A recovery towards 0.7200 by Q1 is plausible, especially if the Fed seen as unlikely to deliver the two hikes priced by Apr-2027."
In the broader forex markets, the dollar was hovering close to a 19-month peak as bets grew that the Federal Reserve could hike interest rates by 50 basis points next month to get ahead of inflation, currently priced at 10%.
Reserve Bank of Australia board member Marnie Baker cancelled a scheduled public appearance on Thursday because of unforeseen family circumstances.
Despite the hawkish pricing for the Fed, the RBA is seen holding interest rates steady at an 18-year high of 4.85% until the second half of 2027 when rate cuts are coming into view.
The Reserve Bank of New Zealand is widely expected to lift interest rates by a quarter-point in December to 3%, with two additional rate hikes priced in by the end of next year. - Reuters
