Investing.com - The Australian dollar moved lower against the U.S. dollar Wednesday, as the market remained uneasy on European progress toward debt solution despite the reported resignation of Italy’s prime minister.
AUD/USD hit 1.0370 in early Asian trade, the pair’s lowest since Tuesday; the pair subsequently consolidated at 1.0384, falling 0.08%.
The pair was likely to find support at 1.0204, last Thursday’s low, and resistance at 1.0446, last Thursday’s high.
On Tuesday, Italy’s Parliament approved a routine budget proposal, with opposition lawmakers abstaining, but leaving Berlusconi short of an absolute majority and facing an imminent confidence vote unless the prime minister were to step down.
The vote was widely expected to be a referendum on Berlusconi’s prime ministership and reports late Tuesday said he had signaled a willingness to resign.
Meanwhile, U.S. consumer confidence rose less than expected, in November, according to a report Tuesday from Investor’s Business Daily and TechnoMetrica Market Intelligence.
The IBD/TIPP Economic Optimism Index rose by 0.3 points to 40.6 in November, after registering a 40.3 reading in October. Market expectations were for the index to gain 0.8 points to 41.1 for the month.
Events in Italy helped to lift share prices on Wall Street Tuesday, with the Dow Jones Industrial Average gaining 0.84% to 12,170.20, the Nasdaq Composite Index added 1.2% to 2,727.49, and the S&P 500 rose 1.17% to close at 1,275.92.
Elsewhere, Australia’s Westpac-Melbourne Institute of Consumer Sentiment Index rose for the third straight month by 6.3% to 103.4, up from 97.4 in October.
Westpac chief economist Bill Evans said the results were within expectations and the rise could be directly attributed to the Reserve Bank of Australia’s decision to cut interest rates by 25 basis points, to 4.5%, at its November 1 board meeting.
“The cut represented the first interest rate reduction since April 2009 and comes only a few months after the bank desisted from threatening higher rates,” Evans said about Wednesday’s report.
In Sydney, Australian shares moved higher in early Wednesday trade, on strength in mining issues, with the benchmark S&P/ASX 200 rising 1.53% to 4,359.60.
Meanwhile, the Australian dollar was lower against both the euro and the Japanese yen, with EUR/AUD rising 0.14% to hit 1.3326, and AUD/JPY down 0.22% to hit 80.58.
Reserve Bank of Australia’s assistant governor Phillip Lowe was scheduled to speak at the Australian Farm Institute’s Agriculture Roundtable Conference on Thursday.