Forexpros – The Australian dollar fell against the greenback on Wednesday in wake of former Greek Prime Minister Lucas Papademos comments that Greece plans to stay in the euro although it can’t rule out the possibility of leaving.
A World Bank decision to cut China’s growth forecast sent the Australian currency falling as well.
In Asian trading on Wednesday, AUD/USD hit 0.9764, down 0.46%, up from a session low of 0.9742 and off from a high of 0.9812.
The pair was likely to test support at 0.9742, the earlier low, and resistance at 0.9935, the high on May 22.
From Greece, Papdemos told CNBC that the country had no plans to exit the eurozone, although he “cannot exclude the possibility” that other countries were making contingency plans for such an event, clarifying his other comments to various newswires that quoted him as saying that exiting the euro was an unlikely but real possibility.
Greece goes to the polls on June 17 to elect a new parliament, and sentiments are building that the leftist Syriza political party will make a strong showing.
After a May 6 ballot, Syriza politicians refused to take part in a coalition government due to their opposition to austerity measures, which Greece had accepted in exchange for bailout money, which forced the country to hold new elections in June.
Reports that the World Bank has cut China’s 2012 GDP Growth Forecast to 8.2% from 8.4% also pressured the Australian currency down, which is often sensitive to global growth rates, especially when it comes to China, a key export market.
An Organization for Economic Cooperation and Development report forecasting rising unemployment rates for Australia weakened the currency as well.
The Australian dollar was down against the euro and down against the yen, with EUR/AUD up 0.30% at 0.2971 and AUD/JPY down 0.61% at 77.95.
The pair will continue to digest World Bank revisions to the Chinese economy.
The U.S. will release government data on new home sales, a leading indicator of economic health, as well as data on crude oil stockpiles.
Forexpros
