AUD and NZD Struggle Near Multi-Month Lows Amid Rising Oil Prices

The Australian and New Zealand dollars are trading near multi-month lows on Monday due to rising oil prices, which have added inflation risks and lifted US yields.

The Aussie is currently flat at $0.7020 after losing 1.5% last week, its third straight week of declines that broke key support at the 200-day moving average of $0.7025.

This has left it well below a four-month peak of $0.7238 seen just two weeks ago, and despite markets narrowing the odds on further rate rises, the Reserve Bank of Australia is now considered all but certain to hike by 25 basis points to 4.60% on Tuesday.

Markets are currently pricing in about 40 basis points of more tightening after Tuesday, with Joseph Capurso, head of foreign exchange at the Commonwealth Bank of Australia, saying that AUD/USD may receive brief support from a 'hawkish hike' by the Reserve Bank on Tuesday.

However, Capurso still expects the Aussie to fall this week, likely testing $0.6951, citing the strength of the US economy attracting capital and weighing on all currencies.