2023.03.2005:50:00UTC+00Australian Dollar Slides As Traders Remain Cautious

The Australian dollar retreated from recent highs against other major currencies in the Asian session on Monday, as traders remain cautious and assess the impact of the crisis in the global banking sector, even as failing financial institutions secure a lifeline from peer institutions and central banks to avoid a global meltdown.

Traders also looked ahead to Wednesday's U.S. Federal Reserve's monetary policy announcement, expecting the Fed to raise interest rate by 25 basis points. CME Group's FedWatch tool currently indicates a 43.2 percent chance the Fed will leave rates unchanged and a 56.8 percent chance of a 25 basis point rate hike.

The benchmark S&P/ASX 200 Index is losing 60.90 points or 0.87 percent to 6,933.90. The broader All Ordinaries Index is down 69.90 points or 0.93 percent to 7,121.30.

In the Asian session today, the Australian dollar fell to 1.5948 against the euro and 88.26 against the yen, from recent highs of 1.5870 and 89.23, respectively. If the aussie extends its downtrend, it is likely to find support around 1.60 against the euro and 86.00 against the yen.

Against the U.S. and the Canadian dollars, the aussie dropped to 0.6689 and 0.9179 from recent near 2-week high of 0.6730 and near 3-week high of 0.9214, respectively. The aussie may find its support level around 0.63 against the greenback and 0.90 against the loonie.

The aussie edged down to 1.0697 against the NZ dollar, from an early high of 1.0728. Earlier in the session, the aussie fell to nearly a 3-month low of 1.0673. The next support level for the AUD/NZD pair is seen around the 1.09 area.

Looking ahead, German PPI report for February is due to be released at 3:00 am ET.

Eurozone trade data for January is slated for release at 6:00 am ET.

At 10:00 am ET, the European Central Bank's President Christine Lagarde is set for a speech.