The Australian dollar hit a four-year low against its U.S. counterpart on Wednesday ahead of a clutch of data likely to prove crucial for the immediate prospects of a handful of other currencies against the greenback.
The euro, up almost a cent against the dollar this week, dipped briefly after a senior European Central Bank official pointed explicitly to the chances of it opting for outright purchases of government bonds in the first quarter of next year.
The Aussie has been one of the biggest sufferers during the dollar’s rally since July and Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe propelled it to $0.8514 on Tuesday by saying it was still overvalued.
Dealers said investors in Europe had continued to sell the currency in early trades, pushing it to a low of $0.8499 and below support at around 109.0 New Zealand dollars above which it had held since August.
“There are those who say the Aussie should bounce from these levels but my feeling is, if it breaks below this support against the kiwi, that may be significant,” said Daragh Maher, a strategist with HSBC in London.
Traders said U.S. numbers on jobs, consumer sentiment and durable goods orders around lunchtime on Wednesday would test the strength of a slight recovery for the euro after European Central Bank Governor Mario Draghi last week sank the common currency to less than $1.24, its lowest in more than two years.