The Australian and New Zealand dollars slipped against their major counterparts in early Asian trading on Wednesday in response to former Greek Prime Minister's remark that Greece may leave the euro zone.
The former Greek Prime Minister Lucas Papademos told on Tuesday that there is only limited room for the country to negotiate its loan program.
The Australian dollar that ended Tuesday's trading at 0.9810 against the U.S. dollar fell to a fresh 6-month low of 0.9744. The next downside target level for the aussie-greenback pair is seen at 0.970.
In economic news, a survey by Westpac and Melbourne Institute showed that a leading indicator of Australia's economic activity rose again in March, but continued to remain below its long-term trend.
The leading index, which indicates the likely pace of economic activity three to nine months into the future, was 2.2 percent in March, below its long term trend of 2.9 percent.
Meanwhile, the Conference Board's leading economic indicator for Australia increased 0.2 percent month-on-month in March after a flat reading in February.
Despite the latest gain, the index has not yet fully recovered from a series of declines through December. Its six-month growth has remained negative since November.
The Australian dollar slipped to 2-day lows of 77.87 against the yen and 1.2990 against the euro, compared to yesterday's close of 78.43 and 1.2941, respectively. If the aussie weakens further, it may likely target 77.6 against the yen and 1.304 against the yen.
Against the Canadian dollar, the Australian dollar dropped to a fresh 7- 1/2 -month low of 0.9971 from Tuesday's close of 1.0018. On the downside, 0.995 is seen as the next target level for the Australian currency.
The New Zealand dollar also declined, hitting a fresh 5-month low of 0.7491 against the US dollar and a 2-day low of 59.86 against the yen. The next downside target level for the kiwi is seen at 0.740 against the greenback and 59.5 against the yen. The kiwi-greenback and the kiwi-yen pairs were worth 0.7555 and 60.40, respectively at yesterday's close.
The Bank of Japan today decided to retain its interest rate at 0.1 percent. The central bank's policy board also decided to maintain the size of its asset purchase program at JPY 70 trillion.
The New Zealand dollar also edged down to a 2-day low of 1.6890 against the euro and if the kiwi weakens further, it may likely target the 1.697 level. At yesterday's close, the euro-kiwi pair was quoted at 1.6803.
Looking ahead, Eurozone current account for March and the Bank of England's May meeting minutes are scheduled for release in the European session.
The U.S. new home sales for April, house price index for March, Canada's retail sales for March and leading indicators for April are expected in the New York morning session.
Investors also focus on the European Union summit later in the day, where leaders are expected to discuss measures to promote growth and ways to keep Greece in the euro zone.
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