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Australian, NZ Dollars Lower Following Hawkish Fed Minutes

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The Australian and NZ dollars fell against their major rivals in the Asian session on Thursday, as the U.S. Federal Reserve’s minutes from the March meeting showed that policymakers are preparing to raise rates aggressively in upcoming policy meetings and plans to reduce the size of the balance sheet by $95 billion a month after the meeting in May.

The minutes showed that most policymakers supported rate hikes of 50 basis points at upcoming meetings, if inflation pressures remained elevated or intensified.

Fed policymakers broadly agreed to reduce its securities holdings at a pace of $95 billion per month, possibly from next month.

The Fed noted that it planned to deliver a half-point increase at the March meeting, but it was dropped due to the uncertainty related to Russia’s invasion of Ukraine.

The U.S. imposed more sanctions against Russia targeting major state-owned enterprises, government officials and their family members and also banned new investments in the country.

The aussie declined to a 6-day low of 0.7474 against the greenback and a 2-day low of 92.41 against the yen, following its prior highs of 0.7519 and 93.18, respectively. The aussie may find support around 0.72 against the greenback and 89.00 against the yen, should it drops again.

The aussie touched 3-day lows of 1.4602 against the euro and 0.9390 against the loonie, down from its previous highs of 1.4488 and 0.9440, respectively. The next likely support for the aussie is seen around 1.49 against the euro and 0.92 against the loonie.

The aussie pulled back from a prior high of 1.0866 against the kiwi, falling to a 3-day low of 1.0841. On the downside, 1.06 is possibly seen as its next support level.

The kiwi slipped to a 3-day low of 1.5839 against the euro and a 2-day low of 85.19 against the yen, after gaining to 1.5728 and 85.77, respectively earlier in the session. The kiwi is likely to find support around 1.60 against the euro and 82.00 against the yen.

The NZ currency was down against the greenback, at a 9-day low of 0.6889. Next key support for the currency is seen around the 0.66 level.

Looking ahead, Eurozone retail sales for February are due in the European session.

At 7:30 am ET, the European Central Bank publishes the account of the monetary policy meeting of the Governing Council held on March 9 and 10.

U.S. weekly jobless claims for the week ended April 2 and consumer credit for February will be featured in the New York session.

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