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Forex - AUD/USD falls to 1-month low on Italian debt worries

Published 11/10/2011, 03:00 AM
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Investing.com - The Australian dollar fell to a one-month low against its U.S. counterpart on Thursday, as ongoing concerns over the Italian debt crisis weighed on demand for riskier assets.

AUD/USD hit 1.0065 during late Asian trade, the pair's lowest since October 12; the pair subsequently consolidated at 1.0056, shedding 0.85%.

The pair was likely to find support at 0.9905, the low of October 11 and resistance at 1.0231, the high of October 13.

Investors remained wary as Italy's ten-year bond yields closed at a euro-era high of 7.25% on Wednesday, after the promised exit of Prime Minister Silvio Berlusconi failed to convince markets that the next government will be able to slash the country's soaring debt.

Failure to implement the much needed austerity measures could lead Italy to join Greece, Portugal and Ireland in seeking outside support.

Meanwhile, Greek leaders had still not managed to determine who will head the new coalition government.

Earlier Thursday, official data showed that the number of employed people in Australia rose by 10,100 in October, in line with expectations, while the unemployment rate declined more-than-expected, ticking down to 5.2% after a reading of 5.3% in September.

A separate report showed that inflation expectations in Australia fell to 2.5% in November from 3.1% in October.

The Aussie was down against the euro with EUR/AUD rising 0.50%, to hit 1.3418.

Also Thursday, government data showed that China's trade surplus expanded far less-than-expected in October, rising to CNY17.0 billion from CNY14.5 billion the previous month.

Analysts had expected the trade balance to rise to CNY26.3 billion in October.

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