Australian Dollar Falls On U.S. Trump Tariff Threats

(RTTNews) - The Australian dollar weakened against other major currencies in the Asian session on Tuesday, amid concerns about possible tariffs on Chinese imports by U.S. President-Elect Donald Trump.

Markets are nervous as they seek clarity on U.S. President-elect Donald Trump's policy proposals, including increased tariffs, and await key U.S. inflation reading later in the week for directional cues.

Though the markets are optimistic that Trump's policies such as tax reductions and deregulation will help boost corporate earnings, they see an uptick in inflation amid proposed increase in tariffs that will complicate the US Fed's interest-rate plans.

Weakness in mining stocks amid tumbling metal prices, also led to the downtrend of the currency.

Crude oil closed sharply lower, weighed down by a stronger dollar and concerns about demand. West Texas Intermediate Crude oil futures for December ended down $2.34 or 3.6 percent at $68.04 a barrel.

In the Asian trading today, the Australian dollar fell to a 6-day low of 0.6550 against the U.S. dollar, from yesterday's closing value of 0.6574. On the downside, 0.63 is seen as the next support level for the aussie.

Against the yen and the euro, the aussie slipped to 100.56 and 1.6248 from Monday's closing quotes of 101.05 and 1.6201, respectively. If the aussie extends its downtrend, it is likely to find support around 99.00 against the yen and 1.66 against the euro.

Against the Canada and the New Zealand dollars, the aussie edged down to 0.9135 and 1.0997 from yesterday's closing quotes of 0.9154 and 1.1021, respectively. The next possible downside target for the aussie is seen around 0.90 against the loonie and 1.08 against the kiwi.

Looking ahead, Germany CPI data for October and U.K. jobs data for October, are due to be released in the pre-European session.

In the European session, Germany ZEW economic sentiment for November is set to be released.

In the New York session, U.S. NFIB business optimism index for October, Canada building permits for September, U.S. Redbook report, U.S. consumer inflation expectations for October are slated for release.