AUD/USD slipped lower

Australian dollar slipped to lower levels against its US counterpart on Friday, after having maintained gains from Thursday trade, following a speculation that its weekly loss was excessive.

AUD/USD fell to its lowest point today at 0.8984 at 6:18 GMT, after which the pair consolidated at 0.8995. Support was expected to be found at August 6th low, 0.8907, while resistance was to be encountered at August 20th high, 0.9122.

Yesterday the Australian currency was supported after a report said that Chinese manufacturing PMI advanced to a four-month high, to show a reading of 50.1 in August, outpacing preliminary estimates of a value of 48.2, while the index stood at 47.7 in June. Values above 50.0 usually imply that activity has expanded. This data caused positive influence, as China is Australia’s largest export partner.

A separate report by the Conference Board revealed that its leading index for Australia dropped by 0.2% in the month of June, after remaining flat a month ago.

AUD/USD pair remained relatively steady after the release of strong manufacturing PMI data out of the United States on Thursday. The index advanced to 53.9 in August, reaching a five-month high, from a value of 53.7 in July. Preliminary estimates pointed that the indicator will increase to 54.0. In addition, the Department of Labor reported that initial jobless claims rose by 13 000 to 336 000 during the week ending on August 17th 2013, as experts had anticipated a lesser increase in the number of claims, to 330 000. Result during the preceding week was revised up by 3 000 to reach 323 000 claims, which marks the lowest level in five years. This set of data was expected to support the idea that the Federal Reserve Bank will consider bond purchase tapering, while a possible exit to the Quantitative Easing would strongly support the greenback and put pressure on riskier currencies, such as the Aussie.

Australian dollar has lost 2% this week, while one-month volatility increased by two basis points to 12.52%, after hitting 12.71% on August 21st, which was the highest level since August 5th, according to Bloomberg.

“I would say fair value is around these levels, and I expect Aussie to trade between 88 and 92 U.S. cents for the next little while,” said Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne, cited by Bloomberg. “We could see a bit of upside as people cover shorts. Positioning is still extreme in the Australian dollar.”

Elsewhere, the Aussie was almost unchanged against the euro, with EUR/AUD cross ticking down a mere 0.01% to trade at 1.4831 at 7:00 GMT. On the other hand, AUD/NZD pair was gaining 0.09% on a daily basis to trade at 1.1521 at 7:01 GMT.