The Australian dollar declined for a second day versus the greenback on concern Europe’s debt crisis is worsening. The AUD/USD moved south as Aussie declined for the fourth day against the yen on rising risk aversion with the bearish sentiment.
The Australian currency continued its downside movement after Standard & Poor’s (which is a United States-based financial services company) cut its outlook for the US credit rating to “negative”, reducing the demand for higher yielding assets such as Aussie.
The Reserve Bank of Australia said in its minutes for the April 05 meeting that economic growth in Australia was moderate during the first three months of the year after the natural disasters that hit the nation on January and February.
The Reserve Bank of Australia decided to leave interest rates steady for fourth consecutive month at the highest level of 4.75% after inflation rates slowed. The bank won’t increase rates during the fist half of the year pushing the AUD to decline against its major counterparts.
On Wednesday, the market awaits important data from Australia and the United States. Australia is to release the leading index for the month of February at 00:30 GMT that showed a drop by 0.1% in January.
Australia will also release the quarterly import price index at 01:30 GMT that dropped by 3.8% in the quarter of September to December in 2010 and expected with 0.9% rise this quarter.
The U.S economy is to release more housing data with existing home sales for March at 14:00 GMT. Home sales are expected at 5.00 million with 2.5 percent rise reversing higher from the previous 9.6% slump.
The U.S. housing data is anticipated to show some improvement during March, which could help ease risk aversion and mounting woes over the outlook for the recovery which in return will ease aussie’s losses if the market turned to focus on upbeat data.
The rest of the week there is no data about the Australian economy, but the world’s largest economy will release data that will continue to influence the pair’s movement.
Written by ForexMansion.com