The Australian dollar weakened against other major currencies in the Asian session on Thursday, as investor sentiment dampened after the U.S. Federal Reserve left interest rates unchanged as expected, but signaled another rate hike is imminent despite recent economic weakness. Lower base metal prices weighed on resources stocks.
The Federal Reserve voted unanimously to leave its benchmark interest rate at 0.75 percent to 1 percent and continues to project two more rate hikes in 2017.
In other economic news, data from the Australian Bureau of Statistics showed that Australia had a seasonally adjusted merchandise trade surplus of A$3.107 billion in March. That was shy of forecasts for A$3.250 billion and down from A$3.574 in February.
Imports were up 5 percent on month to A$30.235 billion, while exports gained 2 percent at A$33.343 billion.
Data from Caixin showed that the services sector in China continued to expand in April, albeit at a slower rate, with a PMI score of 51.5. That’s down from 52.2 in March
The composite index came in with a score of 51.2, down from 52.1 in the previous month.
Wednesday, the Australian dollar had fallen 1.48 percent against the U.S. dollar, 0.85 percent against the yen, 1.08 percent against the euro, 1.34 percent against the loonie and 0.66 percent against the kiwi.
In the Asian trading, the Australian dollar fell to more than a 4-month low of 1.4705 against the euro and a 3-day low of 83.55 against the yen, from yesterday’s closing quotes of 1.4663 and 83.67, respectively. The aussie may test support near 1.48 against the euro and 82.00 against the yen.
Against the U.S., the Canadian and the New Zealand dollars, the aussie dropped to nearly a 4-month low of 0.7407, a 1-week low of 1.0163 and a 10-day low of 1.0759 from yesterday’s closing quotes of 0.7422, 1.0190 and 1.0791, respectively. If the aussie extends its downtrend, it is likely to find support around 0.73 against the greenback, 1.00 against the loonie, and 1.06 against the kiwi.
Looking ahead, PMI reports from major European economies for April, U.K. mortgage approvals for March and Eurozone retail sales data for March are due to be released later in the day.
At 6:30 am ET, European Central Bank board member Sabine Lautenschlager is expected to speak in Frankfurt.
At 7:00 am ET, European Central Bank Executive Board Member Peter Praet will speak at a conference in Brussels.
At 7:35 am ET, European Central Bank Executive Board member Yves Mersch is expected to speak at a conference in Luxembourg.
In the New York session, U.S. and Canada trade data for March, U.S. weekly jobless claims for the week ended April 29, U.S. factory orders and durable goods orders for March are slated for release,
At 11:00 am ET, ECB supervisor Daniele Nouy, European Banking Authority Director Adam Farkas,and Bundesbank board member Andreas Dombret are scheduled to speak at a banking conference in Frankfurt.
At 12:30 pm ET, European Central Bank President Mario Draghi is expected…