The Australian dollar extended the decline against its US peer as the indecisive outcome of the Italian election fueled the risk aversion sentiment among Forex traders. The New Zealand dollar paused its drop, but remained weak as the nation’s trade balance posted an unexpected deficit.
No party had clear victory in the Italian election, which ended on February 25. This essentially created a hung parliament. Traders perceived it as one of the worst possible outcomes, resulting in a weak government that will be unable to deal with the country’s problems.
The New Zealand trade balance showed the deficit of NZ$305 million in January after demonstrating the surplus of NZ$534 million in the preceding month. Analysts have expected a surplus of NZ$113 million.
AUD/USD fell from 1.0226 to 1.0217 and AUD/JPY dropped from 94.05 to 93.78 as of 2:46 GMT today. NZD/USD traded at 0.8246 on today’s trading session after tumbling from 0.8334 to 0.8249 on yesterday’s session. AUD/NZD went down from 1.2391 to 1.2381.
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