The Australian dollar remained a clear underperformer among major currencies in Asian deals Friday as an across the board decline in equity markets in the Asia-pacific region prompted traders to hold off positions in high-risk currencies.
Asian equity markets are down on disappointing employment data from the United States overnight and lingering worries about Europe.
The benchmark S&P/ASX 200 index, which declined to around 4,339, is currently trading at 4,346.3, down 37.4 points or 0.9 percent from its previous close. The broader All Ordinaries index is down 40 points or 0.9 percent at 4,371.8. All other markets in the region are also down with notable losses.
Initial jobless claims in the U.S. increased unexpectedly in the week ended August 18, rising to 372,000 from the previous week's revised figure of 368,000. Economists had expected jobless claims to slip to 365,000 from the 366,000 originally reported for the previous week.
Worries about the financial situation in Europe also fueled risk-selling, with traders keeping a close eye on a meeting between German Chancellor Angela Merkel and French President Francois Hollande. Both Merkel and Hollande urged Greece to stick to crucial reforms in order to remain a part of the eurozone.
With the latest FOMC minutes turning more dovish than expected and the U.S. employment picture in the recent past showing bleak, the Fed Chairman Bernanke's speech at the Jackson Hole Symposium in the month-end is seen crucial as the market is staunch in its longing for further quantitative easing.
In economic news, the Conference Board's Leading Index for Australia increased in June by 0.2 percent, the board announced today. The coincident index increased by 0.1 percent for June.
The Australian dollar extended previous sessions' downtrend against its U.S. counterpart, falling to a 2-day low of 1.0424, down almost 0.2 percent from Thursday's close of 1.0442.
The AUD/USD pair is hovering at its trend line channel support in the 4-hour time frame and further bear run could re-test the 1.0180 level after a gap of more than 1-month. Any positive cues could help the pair rebound above the 1.05 level and beyond.
The Australian dollar fell to 1.2825 against its Tasman rival, its lowest level since July 12. Chart in the longer-time frame for the AUD/NZD pair shows a prospective bear run in the near to medium term, as it has breached the symmetrical triangle formation in the daily chart and is heading towards the major support level around the 1.2660/90 region.
New Zealand saw a seasonally adjusted merchandise trade surplus of NZ$15 million in June, beating forecasts for a deficit NZ$41 million, although it was down from the NZ$331 million surplus in June. Seasonally adjusted exports fell 0.4 percent and imports fell 1.5 percent compared with June 2012.
The Aussie slipped to 1.2055 against the euro in early Asian deals Friday, its weakest level since July 12. The near-term outlook for the local unit is quite bearish, as the euro-aussie pair has breached the 23.6 percent retracement level and is heading towards the next barrier at its 38.2 percent retracement range of 1.2150/60.
The Australian dollar also fell as much as yesterday's low of 81.90 against the yen on Friday morning in Asia. The trend-line channel support has broken for the aussie-yen pair in the 2-hour chart and it is moving closer to the 81.60 support area.
Bank of Japan said in a report that its corporate service prices index was down 0.2 percent on year in July, standing at 96.0 following the downwardly revised 0.4 percent contraction in June. On a monthly basis, prices were up 0.1 percent after easing 0.2 percent in June.
The Australian dollar depreciated by 0.15 percent to a 2-day low of 1.0365 against its Canadian counterpart from Thursday's North American session closing value of 1.0381. The aussie-loonie pair has reversed its recent corrective mode in the daily chart and is poised to re-test the demand zone around the 1.03 level in the near-term.
Market will closely watch the developments in Europe, with the Spanish cabinet meeting today and the Greek Prime Minister Antonis Samaras arriving in Berlin for talks with the German Chancellor Angela Merkel.
The U.S. durable goods orders for July is the lone economic data to watch in the New York session.
by RTT Staff Writer
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