Oil Price Surge Dents Aussie and Kiwi Dollar Values
The Australian and New Zealand dollars declined on Monday as rising oil prices sparked concerns about global policy tightening, dampening risk appetite.
The AUD/USD fell by 0.3% to $0.7148, retreating from a four-month high of $0.7238, after losing 0.4% last week. The kiwi dollar also slipped 0.3% to $0.5796, its lowest point since late July.
Brent crude oil prices climbed 3% on Monday following fresh strikes in the Gulf region and hotter-than-expected US inflation data, which boosted expectations of a Federal Reserve rate hike this week. Markets are pricing in an 84% chance of such a move, according to some estimates.
'AUD/USD will continue to fall this week in our view, possibly testing weak support at 0.7076,' said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia. He added that a rate hike by the Federal Reserve would give the greenback a modest boost.