Forex - AUD/USD edges lower as Cyprus worries dominate

Published 03/22/2013, 02:41 AM
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Investing.com - The Australian dollar edged lower against its U.S. counterpart on Friday, pulling away from a more than one-month high, as concerns over the financial situation in Cyprus continued to dominate market sentiment.

AUD/USD hit 1.0421 during late Asian trade, the session low; the pair subsequently consolidated at 1.0426, slipping 0.14%.

The pair was likely to find support at 1.0364, Thursday's low and resistance at 1.0476, the high of January 29.

Markets were jittery as Cyprus's parliament was set to vote later Friday on a new solution on an international bailout deal, after it rejected a controversial bank deposit tax in a vote on Tuesday.

On Thursday, the European Union threatened to withdraw its bailout offer for Cyprus if no deal is finalized by Monday.

European officials said on Thursday that Cyprus must raise the EUR5.8 billion necessary for it to secure a EUR10 billion bailout by Monday, or face a collapse of its financial system.

Meanwhile, concerns over the deteriorating economic outlook for the euro zone also weighed, after data on Thursday showed an unexpected contraction in the German manufacturing sector.

In Australia, the Conference Board said its leading index rose 0.2% in January, after a 0.1% fall the previous month.

The Aussie was lower against the euro with EUR/AUD adding 0.13%, to hit 1.2371.

Later in the day, the Ifo Institute was to release a report on German business climate.


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