Antipodean Currencies Slide On Trump Tariff Threat

(RTTNews) - The Antipodean currencies such as the Australia and the New Zealand dollars weakened against their major currencies in the Asian session on Tuesday, amid concerns about the economic impact after U.S. President Donald Trump confirmed the 25% tariffs on Canada and Mexico as well as the additional 10 percent tariff on China will take effect Tuesday. The reciprocal tariffs on other U.S. trade partners will be imposed on April 2.

U.S. President Donald Trump paused all military aid for Ukraine to ensure that it will contribute to a solution.

Meanwhile, Canada responded by imposing a 25 percent tax on $155 billion worth of American goods, Beijing has warned that it would take countermeasures.

Weakness across most sectors led by mining and technology stocks, after US President Donald Trump confirmed he will move forward with higher tariffs on major trading partners, also led to the downturn of the commodity linked currencies such as the AUD and NZD.

Crude oil prices fell sharply to a near three-month low, weighed down by concerns about possible excess supply in the market after reports said OPEC and allies would go ahead with a plan of oil output increase in April. West Texas Intermediate Crude oil futures for March settled lower by $1.39 or nearly 2 percent, at $68.37 a barrel.

The Reserve Bank of Australia's (RBA) February meeting minutes emphasized the economy's negative risks, as the Board believed there was more evidence to support rate cuts.

In economic news, retail sales in Australia increased by 0.3 percent month-on-month in January 2025, after a 0.1 percent decline in the previous month and matching market expectations.

Meanwhile, Australia's current account deficit declined to A$12.5 billion in the fourth quarter of 2024 from a downwardly revised A$19.9 billion shortfall in the third quarter, indicating the seventh consecutive quarter of deficit despite missing market expectations of an A$11.9 billion gap.

In the Asian trading today, the Australian dollar fell to near 7-month lows of 92.26 against the yen and 1.6929 against the euro, from yesterday's closing quotes of 92.80 and 1.6870, respectively. If the aussie extends its downtrend, it is likely to find support around 91.00 against the yen and 1.70 against the euro.

Against the U.S. and the New Zealand dollars, the aussie slid to a 1-month low of 0.6187 and an 8-day low of 1.1055 from Monday's closing quotes of 0.6216 and 1.1075, respectively. The aussie may test support near 0.60 against the greenback and 1.09 against the kiwi.

The aussie edged down to 0.8978 against the Canadian dollar, from yesterday's closing value of 0.9009. On the downside, 0.88 is seen as the next support level for the aussie.

The NZ dollar slid to a 5-year low of 1.8718 against the euro and nearly a 7-month low of 83.44 against the yen, from yesterday's closing quotes of 1.8684 and 83.79, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.89 against the euro and 81.00 against the yen.

Against the U.S. dollar, the kiwi edged down to 0.5596 from Monday's closing value of 0.5612. The kiwi is likely to find support around the 0.54 region.

Looking ahead, Eurozone unemployment data for January is due to be released at 5:00 am ET in the European session. The jobless rate is seen at 6.3 percent in January, unchanged from December.

In the New York session, U.S. Redbook report and U.S. RCM/TIPP economic optimism index for March are slated for release.