Forex - Aussie, Kiwi Slip Lower as Greenback Continues to Strengthen

Aussie and kiwi fall against stronger greenback in late trade

Investing.com - The Australian and New Zealand dollars slipped lower against their U.S. counterpart on Tuesday, as sentiment on the greenback continued to improve ahead of the U.S. State of the Union due later in the day and the Federal Reserve's monthly policy decision on Wednesday.

AUD/USD slid 0.32% to 0.8067, pulling further away from Friday's 32-month peak of 0.8137.

Later Tuesday, U.S. President Donald Trump was set speak to Congress in his first official State of the Union address.

Comments from the White House recently weighed on the greenback, especially after U.S. Treasury Secretary Steven Mnuchin said that a weaker dollar was positive for American trade.

However, President Trump contradicted Mnuchin's position by defending the need for a strong currency. Traders fear the U.S. administration may use currency policy as a tool to get better trade deals with other countries.

Market participants were also looking ahead to the Fed's upcoming policy decision on Wednesday for potential indications on the pace of interest rate hikes this year. The U.S. central bank is widely expected to raise rates three times in 2018.

Earlier Tuesday, the National Australia Bank said its business confidence index rose to 11 in December from a reading of 6 the previous month, disappointing expectations for an increase to 12.

NZD/USD fell 0.22% to trade at 0.7309.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 89.37 by 02:00 a.m. ET (06:00 GMT), further distancing itself from last Thursday's three-year lows of 88.25.