The Australian and New Zealand dollars declined against their major counterparts on Thursday's Asian session as traders sold high-yielding assets after China manufacturing activity showed contraction and on concerns about Federal Reserve tapering its asset purchase program.
China's manufacturing activity declined unexpectedly in May, preliminary results of a survey by Markit Economics showed today.
The headline purchasing managers' index fell to a seven-month low of 49.6 in May from 50.4 in April. Economists expected the reading to remain unchanged from March's level.
In his testimony before the Joint Economic Committee of Congress yesterday, Federal Reserve Chairman Ben Bernanke downplayed speculation that the central bank is planning to taper its $85 billion monthly bond buying program.
"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," Bernanke told lawmakers.
However, Bernake told that policy makers are ready to scale back the QE3 program if presented with data showing sustainable improvement in the labor market. "The key to this program is the data," Bernanke said.
The aussie fell to 0.9626 against the U.S. dollar, its lowest level since June 2012. This is down 0.36 percent from Wednesday's close of 0.9661. The aussie-greenback pair is poised to find support around 0.94 level.
The aussie slipped to a 6-day low of 0.9995 against the loonie and further collapse of the aussie-loonie pair from this mark will bring it to the lowest level reached on October 2012. At yesterday's close, the pair finished deals at 1.0054.
The Australian currency declined to a 3-week low of 99.29 against the yen, reversing from multi-day high of 100.95 touched on Wednesday. If the aussie-yen pair continues downtrend, it may seek support around 98.00 level.
The aussie depreciated to a 1-1/2-year low of 1.3334 against the European currency from Wednesday's close of 1.3255. The aussie is poised to seek support around 1.35 level.
The aussie reached as low as 1.1966 against the NZ dollar, easing from a 2-day high of 1.2025 hit in previous deals. The aussie-kiwi pair may face next downside target level around 1.19.
The NZ dollar followed a similar pattern, reaching as low as 0.8023 against the U.S. dollar, a level not seen since September 2012. On the downside, the kiwi-greenback pair may breach 0.79 level. The pair ended yesterday's deals at 0.8074.
The kiwi declined to a 3-day low of 82.72 against the yen, after having touched a 6-day high of 84.36 on Wednesday. An extension of downtrend will see the kiwi breaking 0.81 level.
The NZ dollar slipped to a fresh 3-month low of 1.6005 against the European single currency, down from Wednesday's New York session close of 1.5917. The next downside target level for the kiwi lies around 1.61.
Looking ahead, PMIs from major European economies, second estimate of U.K. first quarter GDP data and Eurozone flash consumer sentiment index for May are scheduled for release in the European session.
The U.S. weekly jobless claims for the week ended May 17, new home sales for April and house price index for March are due in the New York session.
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Forex News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.