Forex - Australian dollar weaker ahead of AI Group services index

Investing.com - The Australian dollar fell early Wednesday ahead of a survey on the services industry outlook, while the yen eased slightly as well.

AUD/USD traded at 0.8078, down 0.08%, while USD/JPY changed hands at 118.47, up 0.02%.

The AI Group Services Index for December at 0930 Sydney time (2230 GMT). The December reading is expected to reveal another month of contraction after November's 43.8 reading.

Overnight, the dollar edged up against the other major currencies on Tuesday, still trading near nine-year highs despite the release of disappointing U.S. service sector and factory orders data as heightened risk aversion continued to support safe haven demand.

In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index declined to a six-month low of 56.2 last month from a reading of 59.3 in November. Analysts had expected the index to fall to 58.0 in December.

A separate report showed that U.S. factory orders dropped 0.7% in November, confounding expectations for a 0.5% slip, after a 0.7% fall in October.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, was up 0.02% at 91.88, not far from Monday's nine-year high of 92.05.

EUR/USD was last down to 1.1866, down 0.20%, on Wednesday, not far from the lows of 1.1851 struck on Monday, the weakest level since February 2006.

The single currency touched session lows after data showing euro zone private sector activity grew at a slower pace than initially estimated in December.

The Markit composite PMI, which measures activity in the manufacturing and services sectors in the euro area, was revised down to 51.4 in December from the preliminary estimate of 51.7. The figure was still higher than November’s reading of 51.1.

The weak data added to pressure on the European Central Bank to implement quantitative easing measures ahead of its upcoming meeting on January 22.

Ongoing uncertainty over Greece’s future in the euro zone if far-left anti-austerity party Syriza won elections due to be held later this month also weighed on the single currency.

Investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market. Wednesday’s Federal Reserve meeting minutes will be also closely watched.