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Forex- Aussie dollar trades lower on cliff fears

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Investing.com - The Australian dollar weakened against the greenback in Thursday's Asian session as traders backed away from riskier assets amid lingering concerns about the U.S. fiscal cliff.

In Asian trading Thursday, AUD/USD was off 0.13% to 1.0366. The pair traded as high as 1.0378 and as low as 1.0362. Those levels put the Australian dollar at a three-week against its U.S. rival. The pair has fallen past support at support at 1.0375, the low from November 23 while resistance can be spotted at 1.0485, Friday's high.

President Obama is scheduled to return to Washington, D.C. later today after cutting his Christmas holiday in Hawaii short. The U.S. House and Senate are also scheduled to come back into session in a bid to find a last-minute solution to the fiscal cliff.

U.S. policymakers have until January 1, 2013 before Bush-era tax cuts expire and $600 billion in spending reductions kick in. That dire combination is seen as trimming 4%-5% off U.S. GDP and perhaps sending the world's largest economy into another recession.

At this point, it appears that the White House is willing to accept a small deal to avert the tax increases from going into effect, but President Obama wants that small deal, assuming it can be reached, to set the stage for broader budget negotiations in the new year.

The Aussie dollar also took a step back in Asian trading Thursday due to the China Beige Book report, which shows an uneven recovery for the world's second-largest economy. The report showed strength in China's housing, infrastructure and manufacturing sectors, but new loans and exports were not as strong as some economists expected. China is a prime destination for many Australian commodities exports.

Elsewhere, EUR/AUD jumped 0.24% to 1.2775 while GBP/AUD added 0.16% to 1.5580. AUD/JPY climbed 0.03% to 88.90 while AUD/NZD slid 0.13% to 1.2643.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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