Forex - Australian dollar holds weaker ahead of building approvals data

Investing.com - The Australian dollar held weaker early in Asia on Wednesday ahead of building approvals for February in an otherwise light data day in the region.

AUD/USD traded at 0.9240, down 0.09%, while the USD/JPY tracked nearly flat at 103.64, down 0.02%.    

Job vacancies in Australia for the first quarter and February building approvals are due at 1130 Sydney (0030 GMT). Building approvals re expected to have dropped 2.5% from the previous month's 6.8% gain. Job vacancies data is not closely tracked by the market, but are relevant to jobless figures later in the month.

Overnight, the dollar traded mixed to lower against most major currencies, trimming losses as markets digested a softer-than-expected factory report and determined the data depicted a U.S. economy that remains on the road to recovery.

The Institute for Supply Management reported earlier that its manufacturing purchasing managers' index rose to 53.7 in March from 53.2 in February, missing market expectations for a 54.0 reading.

The report showed that employment growth slowed, with the employment index falling to 51.1 from 52.3, the lowest level since June 2013.

The numbers weakened the dollar earlier, as investors avoided the greenback ahead of Friday's March jobs report, which many feel may depict and improving albeit sluggish U.S. economy, one still in need of Federal Reserve stimulus support.

The Fed is currently purchasing $55 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses interest rates to prop up the economy, weakening the dollar as a side effect.

Upon digesting the data, however, investors viewed the PMI numbers as positive overall, as March marked the second month of gains for the indicator, which kept expectations firm that stimulus programs that have weakened the dollar for years are on their way out.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 80.25.

On Wednesday, the U.S. is to release the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.