Investing.com - The Australian dollar dropped against its U.S. counterpart on Wednesday, as Japan's decision to delay a planned sales tax hike and call early elections weighed on market sentiment.
AUD/USD hit 0.8655 during late Asian trade, the pair's lowest since November 14; the pair subsequently consolidated at 0.8657, retreating 0.70%.
The pair was likely to find support at 0.8588, the low of November 11 and resistance at 0.8794, the high of November 17.
On Tuesday, Japan's Prime Minister Shinzo Abe announced plans to delay a sales tax hike due to take place next year after an increase in April played a part in pulling Japan into a recession.
He also called elections for December, to seek a fresh mandate for his economic policies.
The decision came after data showed that Japan’s economy fell back into recession in the third quarter, contracting by an annualized 1.6% after a 7.3% contraction in the previous quarter.
The Australian dollar had found support on Tuesday, after the minutes of the Reserve Bank of Australia's November policy meeting showed that the bank intends to keep interest rates a record lows for an extended period of time.
The Aussie was lower against the euro, with EUR/AUD gaining 0.58% to 1.4462.
Later in the day, the U.S. was to release data on building permits and housing starts. In addition, the Federal Reserve was to publish the minutes of its October meeting.