The Australian and New Zealand dollars came under renewed pressure on Wednesday as Asian stocks erased gains after Moody's cut Japan's credit rating by a notch. The rating downgrade to Aa3 served as a reminder of the debt burdens plaguing the world's major economies.
The Aussie dollar retreated to $1.0489 from a session high around $1.0524. Traders said hedges placed by local importers when the Aussie briefly climbed above $1.0500 also weighed on the currency. There was also talk of a large fund selling of Aussie and kiwi dollars against the USD, Swissy and yen. The local currency is now set to test hourly support at $1.0473, then $1.0443, while a move towards $1.0550 is also possible given recent market swings.
The NZ dollar last traded at $0.8275, down from $0.8348 in late New York, reversing a 1.5 percent rally overnight to a one-week peak of $0.8358. Against the kiwi, the Aussie was firmer around NZ$1.2657, well-off a one-year trough of NZ$1.2305 struck earlier in the month.
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