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AUD, NZD Weaken for Second Day on Low Risk Appetite

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SYDNEY, June 29 Reuters The Australian and New Zealand dollars weakened on Tuesday after cautious investors cut down on risk amid concerns over rising COVID19 cases and as the greenback strengthened on growing bets of higher U.S. interest rates.

The Aussie dollar weakened 0.1 to 0.7557, falling for a second straight session. The unit dropped as deep as 0.7552 earlier in the day, a level not seen since June 23.

The New Zealand dollar was off 0.1 at 0.7032.

The Aussie fell sharply overnight … after Boston Federal Reserve president Eric Rosengren raised the spectre of higher interest rates to manage the rapid gains seen in the U.S. housing market, Steven Dooley, currency strategist for Western Union Business Solutions said.

Rosengren told the Financial Times the United States cannot afford a boom and bust cycle in the housing market that would threaten financial stability.

While Fed officials have been recently discussing tightening policy, the focus has been on controlling inflation, rather than managing asset prices. Rosengrens comments saw the conversation open on a new front causing the U.S. dollar to climb, Dooley noted.

The dollar index, which tracks the greenback against a basket of six major currencies, was at 91.949, not from a twomonth high of 92.408 seen earlier this month.

New COVID19 outbreaks in Australia and South East Asia have hurt risk appetite, proving another headwind for the antipodean currencies.

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