Investing.com - The Australian dollar dropped against its U.S. counterpart on Thursday, to trade close to three-year lows as downbeat manufacturing data out of China weighed on the export-related currency.
AUD/USD hit 0.8780 during late Asian trade, the pair''s lowest since January 21; the pair subsequently consolidated at 0.8783, retreating 0.78%.
The pair was likely to find support at 0.8757, the low of January 20 and a three-year low and resistance at 0.8888, Wednesday''s high.
Earlier in the day, data showed that the preliminary reading of China’s HSBC manufacturing purchasing managers’ index fell to a six-month low of 49.6 in January from a final reading of 50.5 in the previous month. Analysts had expected the index to tick up to 50.6.
China is Australia''s biggest export partner.
In Australia, the Melbourne Institute said its inflation expectations rose to 2.3% in December, from 2.1% in November.
Meanwhile, demand for the greenback remained supported by expectations that the Federal Reserve will taper its stimulus program by another USD10 billion at its upcoming policy meeting next week.
The Aussie was lower against the New Zealand dollar, with AUD/NZD declining 0.36% to 1.0615.
Also Thursday, data showed that New Zealand''s business manufacturing index ticked down to 56.4 in December, from a reading of 57.0 the previous month.
Later in the day, the U.S. was release the weekly report on initial jobless claims and a private sector report on existing home sales.
Jerusalem Post Annual Conference. Buy it now, Special offer. Come meet Israel's top leaders