Forex News: Australian Dollar Weakens As European Shares Drop Ahead

Australian Dollar Weakens As European Shares Drop Ahead Of US Inflation Data

(RTTNews) - The Australian dollar declined against its major counterparts in the European session on Wednesday amid risk aversion, as investors awaited U.S. inflation data for more clues about the future path of monetary policy.

Also weighing on sentiment, a high stakes meeting between U.S. President Joe Biden and key lawmakers from both parties on Tuesday yielded no breakthrough on the impasse over the U.S. debt ceiling.

The CPI report is expected to provide clues on the Fed's interest-rate path in the near future.

Economists expect the CPI to hold steady at 5 percent year-over-year in April and core CPI to ease to 5.5 percent from 5.6 percent in the previous month.

Oil prices fell sharply to snap a three-day rally after industry data showed a surprise build in U.S. crude and gasoline stockpiles.

The aussie weakened to 0.6749 against the greenback, 0.9040 against the loonie and 91.23 against the yen, off its early highs of 0.6774, 0.9058 and 91.68, respectively. The aussie is seen finding support around 0.65 against the greenback, 0.89 against the loonie and 88.00 against the yen.

The aussie dropped to 1.6234 against the euro, from an early multi-week high of 1.6182. The next possible support for the aussie is seen around the 1.65 level.

The aussie was down against the kiwi, at a 5-day low of 1.0658. If the currency slides again, it may find support around the 1.045 area.

Looking ahead, Canada building permits for March, U.S. CPI and monthly budget statement for April are scheduled for release in the New York session.

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