The Australian dollar edged lower against its U.S. counterpart on Monday, after the release of disappointing Chinese manufacturing data, while investors eyed the Federal Reserve''s upcoming policy meeting this week.
AUD/USD hit 0.8923 during late Asian trade, the session low; the pair subsequently consolidated at 0.8951, slipping 0.19%.
The pair was likely to find support at 0.8904, the low of September 1 and resistance at 0.9072, the high of September 3.
Data showed that the preliminary reading of China’s HSBC manufacturing index ticked down to a three-month low of 50.5 in December from a final reading of 50.8 in November. Economists had expected the index to rise to 51.0.
China is Australia''s biggest export partner.
Meanwhile, investors were turning their attention to the outcome of the Fed’s upcoming policy meeting on Wednesday, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
Recent signs of improvement in the labor market and last week’s agreement on a two-year U.S. budget deal were seen as removing obstacles to the winding back of monetary stimulus.
But with the inflation outlook remaining subdued the Fed may prefer to hold off on tapering stimulus measures until it sees more indications that the recovery is self-sustaining.
The Aussie was also lower against the euro, with EUR/AUD gaining 0.31% to 1.5369.
Later in the day, the U.S. was to release reports on industrial production, manufacturing activity in the New York region and the balance of foreign and domestic investment in U.S. securities.
Jerusalem Post Annual Conference. Buy it now, Special offer. Come meet Israel's top leaders