Forexpros – The Australian dollar was down against its U.S. counterpart on Tuesday, hitting a three-day low as investors remained cautious after hopes for a new plan to solve the euro zone debt crisis were dampened.
AUD/USD hit 1.0130 during late Asian trade, the pair’s lowest since October 13; the pair subsequently consolidated at 1.0154, inching down 0.01%.
The pair was likely to find support at 1.0032, the low of September 21 and resistance at 1.0397, the high of September 16.
Market sentiment was hit on Monday, after Germany’s finance minister quashed speculation that European leaders would be able to unveil a plan to tackle the region’s debt crisis by the end of the week.
German Chancellor Angela Merkel had also dismissed the “dreams” that the October 23 EU summit would result in a definitive solution to the financial crisis in the single currency bloc.
Meanwhile, the Aussie came under pressure after the minutes of the Reserve Bank of Australia signaled a potential rate cut in the near future.
According to the report, RBA policymakers believed that “an improved inflation outlook, if confirmed by further data, would increase the scope for monetary policy to provide some support to demand, should that prove necessary.”
Also Tuesday, official data showed that China’s gross domestic product ticked down to 9.1% in the third quarter, from 9.5% the previous quarter, easing investors’ fears of a more intense slowdown of the country’s economy.
Elsewhere, the Aussie was higher against the euro with EUR/AUD slipping 0.13%, to hit 1.3508.
Later in the day, the U.S. was to release a government report on producer price inflation. Federal Reserve Chairman Ben Bernanke was also due to speak later Tuesday.
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