The Australian dollar remained on the back foot against the US dollar on Wednesday. The antipodean currency has lost around 4.5% this year due to uncertainties around global economy.
Australia's economy grew at the weakest pace in 1.5 years in Q4 as high prices and rising interest rates dampened consumer spending. There were signs of further softness ahead under the current financial conditions.
The latest meeting minutes signalled the RBA’s potential shift towards a neutral stance. The central bank noted the balance of risks to the outlook were “a little more even” than previously.
Adding to concerns about the country’s recovery, iron ore dipped to its lowest level in 10 months this month. Stockpiles held at China’s ports are the largest in more than a year – a sign of oversupply.
The China Iron & Steel Association last week warned that the property downturn and relatively weak infrastructure were a drag on steel demand. CRIC cautioned that the new-home market may not warm up soon.
China steel industry’s PMI for March sank to 44.2 — its lowest reading since May last year, whereas factory activity beat estimates and snapped a five-month contraction.
The Aussie is close to the low of 0.6477 hit in 5 March with the “dead cross” pattern reflecting strong downward momentum. A break below that level will expose the yearly trough around 0.6440.
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