Investing.com - The Australian dollar traded lower against its U.S. counterpart during Wednesday’s Asian session as traders mulled the potential outcome of the Federal Reserve meeting that wraps up later today.
In Asian trading Wednesday, AUD/USD fell 0.13% to 0.9344. The pair was likely to find support at 0.9168, the low of September 9 and resistance at 0.9475, the high of June 11.
The Aussie, considered one of the riskier developed market currencies, previously benefited from the Fed’s easing measure that kept U.S. interest rates low and the dollar weak. However, tapering talk has coincided with weakness in the Aussie, though is probably alright with the Reserve Bank of Australia.
On Tuesday, minutes of the RBA's September 3 policy meeting showed that the central bank retains the option of reducing interest rates and said a further drop in the Australian dollar would help the economy. RBA hinted that it would like to see the Aussie fall more.
The Aussie also came under pressure after Barclays lowered its forecast on China’s 2014 GDP growth 7.4% from 7.8%.
"We note that fundamental challenges facing the Chinese economy have not been addressed, namely: industrial sector overcapacity, financial and fiscal risks (high corporate and local government debt, intertwined with risks associated with a growing shadow banking sector), a latent property bubble, and lower potential growth," according to a Barclays note.
Barclays added that it expects the Chinese government to reduce its 2014 growth estimate to 7% from 7.5%. Credit Suisse raised its estimate for the current year’s GDP growth rate in China to 7.6% from 7.4%, while Deutsche Bank upped its own 2013 forecast to 7.7% from 7.6%, MarketWatch reported.
China is Australia’s largest export market.
Elsewhere, AUD/JPY inched up 0.02% to 92.77 while AUD/NZD rose 0.07% to 1.1367.
In Asian trading Wednesday, AUD/USD fell 0.13% to 0.9344. The pair was likely to find support at 0.9168, the low of September 9 and resistance at 0.9475, the high of June 11.
The Aussie, considered one of the riskier developed market currencies, previously benefited from the Fed’s easing measure that kept U.S. interest rates low and the dollar weak. However, tapering talk has coincided with weakness in the Aussie, though is probably alright with the Reserve Bank of Australia.
On Tuesday, minutes of the RBA's September 3 policy meeting showed that the central bank retains the option of reducing interest rates and said a further drop in the Australian dollar would help the economy. RBA hinted that it would like to see the Aussie fall more.
The Aussie also came under pressure after Barclays lowered its forecast on China’s 2014 GDP growth 7.4% from 7.8%.
"We note that fundamental challenges facing the Chinese economy have not been addressed, namely: industrial sector overcapacity, financial and fiscal risks (high corporate and local government debt, intertwined with risks associated with a growing shadow banking sector), a latent property bubble, and lower potential growth," according to a Barclays note.
Barclays added that it expects the Chinese government to reduce its 2014 growth estimate to 7% from 7.5%. Credit Suisse raised its estimate for the current year’s GDP growth rate in China to 7.6% from 7.4%, while Deutsche Bank upped its own 2013 forecast to 7.7% from 7.6%, MarketWatch reported.
China is Australia’s largest export market.
Elsewhere, AUD/JPY inched up 0.02% to 92.77 while AUD/NZD rose 0.07% to 1.1367.