The AUD dipped slightly lower on Wednesday, thanks in part to some concerns ahead of Spanish bond and Italian T-bill auctions later in the week.
Further hitting perceptions about the Australian currency, which tends to climb along with global equities as a gauge of general investor sentiment, Fitch Ratings said Italy is the biggest threat to instability in the euro-zone in 2012. The developments had traders looking past some improvement on Greece’s debt situation with a senior euro-zone government official saying details of a debt restructuring deal between Greece and its private-sector creditors could be announced early next week.
Also helping the local currency keep from falling further was technical support, even as the AUD remained locked in a correlation trade with the sliding EUR.
At 0500 GMT, the AUD was trading at US$1.0283, down from US$1.0303 late Tuesday and a Wednesday session high of US$1.0318. Strong bids are reportedly in place at $1.0230/50 with stops set on a break of $1.0225. Offers remain from $1.0320 up to $1.0350. AUD/NZD support is at NZ$1.2920. EUR/AUD had a quiet session taking a breather from recent EUR pressure which saw a new record low yesterday of A$1.2362. The cross edging up to A$1.2407 from A$1.2384 before settling around A$1.2390. A break back above $1.2500 now seen needed to negate the extended downtrend so far this year. Against the JPY, the AUD changed hands at Y79.10, down from Y79.156 late Tuesday.
EasyForexNews Research Team