The Aussie eased 0.2% to $0.6656, after making a modest 0.1% gain overnight against a weaker U.S. dollar. It has major support at $0.6573 and faces resistance at the 200-day moving average of $0.6730.
The kiwi also skidded 0.2% to $0.6220, having gained 0.4% overnight, supported by strong jobs data on Wednesday that added to the case for another interest rate hike from the Reserve Bank of New Zealand.
The Antipodeans also tumbled against the safe-haven yen. The Aussie retreated 0.5% to 89.41 yen, after plunging 1.2% overnight, while the kiwi fell 0.4% to 83.59 yen, on top of a 1% drop a day ago.
Overnight, the Fed raised its interest rates by a quarter of a percentage point as widely expected, and opened the door to pausing in the tightening cycle by removing the reference that it "anticipates" that further hikes would be needed.
Risk assets initially rose but soon gave away to rekindled fears about the health of the U.S. banking sector. PacWest Bancorp shares crashed over 50% in after-hours trade on a report the U.S. regional lender is considering a sale. Just last weekend, First Republic Bank, which had been swept up in the bank run, failed and was sold to JPMorgan. First Republic is the third U.S. bank to collapse since March.
"There is no solution to the accelerating banking crisis other than Janet Yellen cancelling the latest policy on depositor safeguards. This is unlikely," said Clifford Bennett, chief economist at ACY Securities. "The banking crisis can only be expected to deteriorate further." Fed funds futures have wagered on a pause from the Fed next month, while pricing in a 70% chance of a cut by September, even though chair Jerome Powell pushed against such pricing in his post-meeting press conference.
Australian bonds gained, joining a global rally after Fed
signalled a pause. Three-year yields eased 10 basis
points to 3.041%, while ten-year yields slid 6 bps to 3.356%.
(Reporting by Stella Qiu; Editing by Christian Schmollinger)
