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The Australian dollar was in a holding pattern on Monday, after suffering big losses last week as a rash of central bank rate hikes stoked concerns about global growth, as it awaited local inflation data for clues on the July rate move.
The short-lived weekend mutiny by Russian mercenaries, potentially bad for risk sentiment, would be a negative for the Aussie at the margin, but investors were waiting for more clarity around the situation.
The Antipodean currency was hovering around $0.6690 , after tumbling 2.8% last week, the biggest since August last year, to $0.6663. It now faces resistance at the 200-day moving average at $0.6693 but has support at Friday's trough of $0.6663 and at the $0.6626 retracement level.
The kiwi dollar fared better with a gain of 0.3% to $0.6167 . It lost 1.4% last week to $0.6118, with resistance standing at its recent top of $0.6247 and support at $0.6030.
On Friday, activity data from Europe and the United States soured risk sentiment, fuelling concerns that the world economy would have to slow down sharply amid hawkish comments from central banks that rate rises may have further to go to tame inflation.
"AUD/USD can continue to ease, and test 0.6547 this week," said Joseph Capurso, a senior currency strategist at the Commonwealth Bank of Australia. "The absence of news on China's speculated economic stimulus package will be AUD's 'Achilles heel' over the next few weeks in our view."
The Aussie, seen as a proxy for the tightly managed yuan, has been under pressure as investors have grown frustrated about China's sluggish economic recovery out of COVID-19 and the lack of big-bang stimulus measures to tackle that.
Domestically, traders are looking ahead to monthly inflation data due on Wednesday and retail sales figures on Thursday. Analysts are looking for annual inflation to ease quite sharply to 6.1% in May from 6.8%.
"Even so, we don't expect the Bank to take its foot off the brakes just yet," said Marcel Thieliant, a senior economist at Capital Economics. "The upshot is that despite the upside surprise in April, both headline and core inflation probably won't be far off the RBA's forecasts for Q2."
Currently, markets are narrowly leaning towards a pause in July with a 60% probability, while wagering that rates would have to rise to 4.55% by November. (Reporting by Stella Qiu; Editing by Muralikumar Anantharaman)