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Australian Dollar Suffers Both from Domestic & Overseas Reports

March 4, 2013 at 16:24 by Vladimir Vyun

Banjo Paterson on Australian 10-dollar billThe Australian dollar weakened today after a report showed that building approvals unexpectedly fell in January. Macroeconomic data from China was also not supportive for the currency.

Australian building approvals fell 2.4 percent on a seasonally adjusted basis in January. Analysts have hoped for an increase by 2.8 percent. Market participants are focusing on tomorrow’s Reserve Bank of Australia rate decision. They do not expect the bank to slash rates, but the poor economic data suggests that an interest rate cut is probable later this year.

China’s non-manufacturing Purchasing Managers’ Index fell from 56.2 to 54.5 last month. China is the major Australia’s trading partner and therefore news from the Asian nation has especially strong impact on the Aussie.

AUD/USD fell from 1.0199 to 1.0164 as of 16:24 GMT today and its daily low of 1.0114 was lowest since July 12. EUR/AUD advanced from 1.2752 to 1.2790, while the intraday high was at 1.2862. AUD/JPY declined from 95.48 to 94.79.

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