Investing.com - The Aussie fell slightly in Asia on Wednesday after weak building approvals as a Fed rate review later in the day expected to add insight on chances for a rate hike at the end of the year looms as does the U.S. presidential election next week that opinion polls say is tightening.
Australia reported building approvals for September slumped 8.7%, compared with an expected 3.0% decline and private house approvals rose 2.3%, compared with a revised up 0.8% fall in the previous month. The number of dwellings fell on a sharp drop in in multi-unit approvals which offset a rise in house approvals. The fall pushed trend approvals into the negative for four months in a row.
AUD/USD traded at 0.7648, down 0.05%, while USD/JPY changed hands at 104.06, down 0.08%. GBP/USD traded at 1.2239, down 0.03%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.01% to 97.77.
Earlier, New Zealand reported the unemployment rate dipped to 4.9% in the third quarter from 5.1% previously as the participation rate rose to 70.10% from 69.70% and the employment change figures rose 1.4%, compared to a 0.6% gain expected.
The market - and the Reserve Bank of New Zealand - expected unemployment to hold at 5.1% - so the fall may be significant. Statistics New Zealand changed its methodology for the household labor force data earlier this year and although some of the new data isn't readily comparable the department says the unemployment-rate comparison is a robust one. However, the labor-cost index data hasn't been revamped and this shows wage inflation, and overall growth in wages, is still low.
NZD/USD traded at 0.7212, up 0.40%.
The U.S. central bank is not expected to raise interest rates, but could signal its intent to hike in December amid signs the economy is picking up steam. Traders are currently pricing in a less than 10% chance of a rate hike this week, according to Investing.com's Fed Rate Monitor Tool. For December, odds stood at 77.4%.
Overnight, the dollar hit fresh lows against the other majors currencies on Tuesday, despite the release of positive U.S. manufacturing activity data, as investors remained cautious ahead of the Federal Reserve’s monthly policy decision due on Wednesday.
The Institute for Supply Management said its manufacturing purchasing managers’s index inched up to 51.9 last month from a reading of 51.5 in September. Analysts had expected the index to rise to 51.7 in October.
The dollar remained supported amid growing expectations for a December rate hike by the Fed, despite dropping last Friday after the FBI said it would review more emails related to Hillary Clinton's private email use while she was secretary of state.
The news sparked fresh uncertainty over Mrs. Clinton’s election prospects ahead of the November 8 vote, amid fears over the implications of a victory for Republican candidate Donald Trump.