The Australian dollar has fallen to new lows

Mike Ehrmann/Getty Images
  • The Australian dollar put in a mixed performance on Wednesday, falling against the greenback but rallying against the crosses.
  • The AUD/USD now sits at the lowest level this year.
  • All of the big data releases today arrive in the second half of the session.

The Australian dollar continued to slide against the greenback on Wednesday, falling to the lowest level seen this year.

However, as seen in the scoreboard below as at 7.50am AEDT, while the Aussie weakened against the dollar, it rallied against all of the major crosses.

AUD/USD 0.7660 , -0.0017 , -0.22%
AUD/JPY 81.85 , 0.99 , 1.22%
AUD/CNH 4.8135 , 0.0032 , 0.07%
AUD/EUR 0.6223 , 0.0034 , 0.55%
AUD/GBP 0.5441 , 0.0019 , 0.35%
AUD/NZD 1.0618 , 0.006 , 0.57%
AUD/CAD 0.9902 , 0.001 , 0.10%

The unusual price action was put down to a combination of quarter-end window dressing, a stronger-than-expected US Q4 GDP report and hawkish language from a key US Federal Reserve official, said Greg McKenna, Chief Market Strategist at AxiTrader.

“There is nothing like a bit month and quarter-end [window dressing], a drift lower in bonds, another reconfirmation of US growth, and a hawkish Fed official talking about higher rates to kick the US dollar higher,” he said in his morning note.

The greenback rallied the hardest against the Japanese yen and euro, two of the strongest performing currencies in the first quarter of the year, with losses of 1.45% and 0.75% respectively.

In contrast, the Australian and Canadian dollars, two of the worst performers so far this year, were among the best performers for the session.

That was despite across-the-board weakness in commodity markets, including iron ore, Australia’s largest export by dollar value, which tumbled into a bear market with a loss of over 3%.

The AUD/USD, after breaking below the low it struck in February, failed to go on with the move, stalling at .7654 before edging higher.

As seen in the daily chart below, the AUD/USD has found support below the .7650 level on several occasions in the past.

AUD/USD Daily Chart

Turning to the day ahead, it looks set to be one dominated once again by sentiment and techncials, along with reduced market liquidity and quarter-end flows, as traders in many parts of the world wind down for the Easter break.

There is a bit of data on the radar although all the bigger hitters arrive in the second half of the session.

Locally, the Reserve Bank of Australia (RBA) will release private sector credit figures for February at 11.30am AEDT. The ABS will also release job vacancy data alongside the credit report.

Regionally, the only headline release comes from Japan with retail sales data for February out at 10.50am AEDT. With inflation the only game in town when it comes to monetary policy considerations from the BoJ, it’s hard to see this release creating any lasting impact.

Later in the session, data highlights include German unemployment and inflation, UK consumer credit and the third reading of Q4 GDP, along with personal income and expenditure data from the US, including all-important core PCE inflation, the Federal Reserve’s preferred measure of gauging price pressures.

It’s seen rising to 1.6% year-on-year in February, up from 1.5% in January. The Fed’s inflation target is 2%per annum.