Forex Pros – The Australian dollar dipped against its U.S. counterpart on Monday, as China’s central bank raised banking reserve requirements after data showed consumer prices rising at their fastest rate in almost three years in March.
AUD/USD hit 1.0528 during late Asian trade, the daily low; the pair subsequently consolidated at 1.0553, slipping 0.14%.
The pair was likely to find support at 1.0456, last Thursday’s low and resistance at 1.0581, the high of April 8 and the pair’s highest level since being floated in December 1983.
The People’s Bank of China’s half-percentage-point increase in banks’ reserve requirement ratio is the central bank’s fourth such increase this year and the tenth since the beginning of 2010.
Official data released Friday showed that China’s annual rate of inflation in March rose to a 32-month high of 5.4%, up from 4.9% in February.
The Australian dollar remained well supported by the nation’s commodities boom, fueled in large part by exports of raw materials to China. China is Australia’s largest trading partner.
The Aussie was also lower against the yen, with AUD/JPY shedding 0.49% to hit 87.43.
Later in the day, U.S. Federal Reserve Bank of Dallas President Richard Fisher was due to speak in Atlanta.