Forex - AUD/USD drops after Australian import prices data

Published 04/30/2015, 02:49 AM
Aussie loses ground vs. greenback on weak Australian data
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Investing.com - The Australian dollar dropped against its U.S. counterpart on Thursday, after downbeat import prices data from Australia and as the greenback began to recover from the Federal Reserve's most recent policy statement on Wednesday.

AUD/USD hit 0.7964 during late Asian trade, the pair's lowest since April 28; the pair subsequently consolidated at 0.7966, sliding 0.52%.

The pair was likely to find support at 0.7829, the low of April 28 and resistance at 0.8076, Wednesday's high and a three-month high.

In a report, the Australian Bureau of Statistics said that import prices fell 0.2% in the three months to March, compared to expectations for a 1.1% rise and after a 0.9% gain in the previous quarter.

The greenback had come under pressure after the Fed cited weakness in the U.S. economy, leading investors to believe that the central bank will not raise interest rates in the near future.

In its monthly policy statement on Wednesday, the Fed said it will take into account labor market conditions, inflationary pressures and expectations of international financial developments when it decides on the timing of a rate increase.

The statement came after data on Wednesday showed that the U.S. gross domestic product grew just 0.2% in the three months to March, slowing from 2.2% in the final quarter of 2014. It was the slowest rate of growth in a year.

The Aussie was higher against the New Zealand dollar, with AUD/NZD climbing 0.71% to 1.0493.

The kiwi weakened broadly after the Reserve Bank of New Zealand held its benchmark interest rate at 3.50% but said it could lower borrowing costs in the future.

"The bank expects to keep monetary policy stimulatory and is not currently considering any increase in interest rates," RBNZ Governor Graeme Wheeler said.

He added that "it would be appropriate to lower the official cash rate if demand weakens and wage and price-setting outcomes settle at levels lower than is consistent with the inflation target."

Also Thursday, Statistics New Zealand reported that building consents increased by 11.0% in March, after a 6.3% decline the previous month.

Later in the day, the U.S. was to publish data on initial jobless claims.

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