AUD/USD drops to 1-month lows on Australian inflation data

28/10/2015 11:09 AST

The Australian dollar dropped to one-month lows against its U.S. counterpart on Wednesday, after the release of weaker than expected inflation data from Australia and as investors awaited the Federal Reserve's policy statement later in the day.

AUD/USD hit 0.7112 during late Asian trade, the pair's lowest since October 6; the pair subsequently consolidated at 0.7128, retreating 0.86%.

The pair was likely to find support at 0.7067, the low of October 6 and resistance at 0.7261, Tuesday's high.

The Australian Bureau of Statistics reported on Wednesday that the consumer price index rose 0.5% in the third quarter, disappointing expectations for a 0.6% gain and after an increase of 0.7% in the three months to June.

Year-on-year, consumer prices rose 1.5% in the last quarter, below expectations for a 1.7% rise.

Meanwhile, the greenback remained under pressure after the Conference Board said on Tuesday that its index of consumer confidence fell to 97.6 this month from a reading of 102.6 in September.

The report came after U.S. Commerce Department said that total durable goods orders decreased by 1.2% last month, matching forecasts.

Core durable goods orders, which exclude volatile transportation items, fell 0.4% in September, compared to expectations for an increase of 0.1%.

Investors were looking ahead to the Fed's monetary policy announcement due later in the day for fresh indications on the timing of an initial rate hike.

The Aussie was lower against the euro, with EUR/AUD climbing 0.88% to 1.5492.

Investing.com