The Australian and New Zealand dollars declined against their U.S. counterpart on Wednesday, as lower oil prices dampened demand for the commodity currencies and as investors locked in profits from the Aussie and kiwi’s recent gains.
AUD/USD slid 0.50% to 0.7586, off the previous session’s two-month highs of 0.7657.
Market sentiment improved in recent sessions as investors hope for a rate cut from the Bank of England at the conclusion of its policy meeting on Thursday, while Japanese Prime Minister Shinzo Abe’s victory in parliamentary elections on Sunday boosted speculation over upcoming stimulus measures by the Bank of Japan.
NZD/USD retreated 0.78% to trade at 0.7243, pulling away from Tuesday’s 14-month peak of 0.7325.
But the commodity currencies weakened as oil prices turned lower after the American Petroleum Institute said on Tuesday that U.S. crude inventories rose unexpectedly by 2.2 million barrels last week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.12% at 96.43, still close to Monday’s two-week high of 96.81.