Forexpros – The Australian dollar was lower against its U.S. counterpart on Monday, as sustained concerns over the euro zone’s debt crisis weighed on market sentiment while the absence of further quantitative easing in the U.S. lent support to the greenback.
AUD/USD hit 1.0019 during late Asian trade, the daily low; the pair subsequently consolidated at 1.0017, falling 0.47%.
The pair was likely to find support at 0.9956, the low of May 14 and resistance at 1.0122, the high of May 9.
Market sentiment weakened amid concerns that the euro zone’s debt crisis is creating a drag on global growth, following a string of data late last week which indicated weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity throughout the single currency bloc.
In addition, Spain’s government was expected to make a formal request for aid for its banking sector later in the day, after reports on Thursday indicated that Madrid would need a rescue package of as much as EUR62 billion.
Investors also remained cautious ahead of a European Union summit due to begin later in the week, amid hopes progress on greater fiscal integration and allowing the bloc’s rescue funds to buy government debt.
Meanwhile, the greenback remained supported after the Federal Reserve announced last week that it is extending the current bond buying program, known as “Operation Twist”, until the end of this year following its policy meeting on Wednesday and said it was ready to do even more to help support the fragile economic recovery.
Elsewhere, the Aussie was fractionally higher against the euro with EUR/AUD inching down 0.05%, to hit 1.2484.
Later in the day, the U.S. was to release official data on new home sales.
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