Forexpros – The Australian dollar fell against its U.S. counterpart on Thursday, as risk sentiment weakened after the Federal Reserve stopped short of implementing a third round of quantitative easing, going against most market expectations.

AUD/USD hit 1.0149 during late Asian trade, the daily low; the pair subsequently consolidated 1.0161, shedding 0.31%.

The pair was likely to find support at 1.0103, the low of June 19 and resistance at 1.0277, the high of May 4.

Investors were disappointed after the U.S. central bank held bank from launching a fresh round of monetary easing. The Fed did however decide to expand its “Operation Twist” by USD267 billion, extending the program until the end of the year.

The program aims to drive down long-term interest rates and reduce borrowing costs for businesses and households, in order to boost the sluggish U.S. economy.

Sentiment was also hit after China’s HSBC purchasing managers’ index for June fell to 48.1 compared with 48.4 in May, remaining in contraction territory for the eighth straight month.

China is Australia’s biggest export partner.

Meanwhile, markets were eyeing an audit of Spanish banks later in the day, amid concerns that the results could show that a EUR100 billion bailout for the country’s banks agreed earlier this month would not be large enough.

Elsewhere, the Aussie was lower against the New Zealand dollar with AUD/NZD declining 0.57%, to hit 1.2726.

Also Thursday, official data showed that New Zealand’s gross domestic product grew by 1.1% in the first quarter, beating expectations for a 0.5% rise and following a 0.4% increase the previous quarter.

Later in the day, the U.S. was to produce government data on unemployment claims, followed by preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.