Investing.com - The Australian dollar dropped against its U.S. counterpart on Wednesday, to trade near five-and-a-half year lows as a sustained rout in oil prices weighed on market sentiment.
AUD/USD hit 0.8068 during late Asian trade, the session low; the pair subsequently consolidated at 0.8103, retreating 0.77%.
The pair was likely to find support at 0.7700 and resistance at 0.8255, the high of January 12.
Oil was hit after the World Bank cut its forecasts for global growth on Tuesday, adding to fears over the faltering economic recovery. Oil prices continued to tumble on Wednesday after falling to almost six year lows in the previous session, after OPEC said it will not cut output despite a global supply glut.
The rout in oil, which has halved in value in six months, has fuelled concerns of exacerbating already low levels of inflation in many major world economies, including the euro zone.
Data last week showed that consumer prices in the euro area fell in December for the first time since October 2009.
The Aussie was sharply lower against the euro, with EUR/AUD jumping 1.05% to 1.4570.
Later in the day, the U.S. was to produce data on retail sales, in addition to reports on import prices and business inventories.