FX.co ★ Australian, NZ Dollars Drop Amid Fed Rate Hike, China Virus Worries

The Australian and NZ dollars weakened against their major counterparts in the Asian session on Monday, as Asian stock markets fell amid a spike in Covid cases in China's capital city of Beijing that sparked worries about the implementation of more stringent restrictions to contain the outbreak.

The business district of Chaoyang started three days of mass testing of those working and living in the area.

Cases continue to grow in Shanghai, where authorities have erected fences outside residential buildings designated as "sealed areas."

China registered about 22,000 new COVID-19 infections on Sunday, with many cities and provinces under some version of a lockdown.

Investors continue to worry about the prospects of faster rate hikes by the U.S. Federal Reserve to tame inflation, which could dent growth.

The Australian currency depreciated to a 3-week low of 91.57 against the yen and a 2-month low of 0.7150 against the greenback, off its early highs of 93.29 and 0.7251, respectively. The aussie is poised to challenge support around 90.00 against the yen and 0.70 against the greenback.

The aussie slipped to near a 6-week low of 1.5055 against the euro and more than a 2-month low of 0.9111 against the loonie, following its prior highs of 1.4881 and 0.9221, respectively. The next possible support for the aussie is seen around 1.53 against the euro and 0.90 against the loonie.

The aussie was down against the kiwi, at near a 2-week low of 1.0858. The aussie is likely to challenge support around the 1.06 mark.

The kiwi fell to near a 3-month low of 0.6582 against the greenback and a 1-1/2-month low of 1.6357 against the euro, falling from its previous highs of 0.6637 and 1.6249, respectively. The kiwi is seen finding support around 0.64 against the greenback and 1.66 against the euro.

The kiwi touched 84.32 against the yen, setting more than a 3-week low. The kiwi may locate support around the 83.00 level.

Looking ahead, Canada wholesale sales for March will be published in the New York session.