The Australian dollar is a smidgen higher against its US counterpart after US lawmakers agreed an interim funding bill but there was no major economic data to inspire the languishing greenback.
At 0635 AEDT on Wednesday, the Australian dollar was worth 79.93 US cents, up from 79.90 US cents on Tuesday.
Westpac’s Imre Speizer says equities managed to push to new highs in both US and parts of Europe, thanks mainly to sound earnings, but even there sentiment had faltered, and didn’t help the US dollar.
‘The USD’s recent weak tone persisted despite intra-day volatility,’ he said in a morning note.
‘The USD remained on the defensive despite some sharp intra-day moves that hinted of broader retracements of its recent losses.
‘The underperformance of the AUD, triggered by some sharp slippage in Chinese bulk futures, persisted, even though AUD/USD (0.7980) did claw back towards 0.8000.
‘Although data releases were not top-tier and were relatively sparse, they underscored market perceptions of USD underperforming despite being relatively strong.’
The only real event risk for the local currency on Wednesday would likely be the Westpac MI leading index.
‘The Westpac MI leading index, the main release in Australasia, was well above trend in November. Inputs for December point to further strength,’ Mr Speizer said.
But, he did not expect it to offer any major boost to the Australian dollar.
‘The uptrend appears less powerful after AUD faltered in front of 0.8040-50 suggesting more retracement towards 0.7925-50 especially if USD holds in Asian trading.’
Meanwhile, the Aussie dollar has continued its slide against both the yen and the euro.
CURRENCY SNAPSHOT AT 0635 AEDT ON WEDNESDAY
One Australian dollar buys:
* 79.93 US cents, from 79.90 on Tuesday
* 88.17 Japanese yen, from 88.56 yen
* 65.05 euro cents, from 65.18 euro cents
(*Currency closes taken at 1700 AEDT previous local session)