Risk aversion is responsible for the declines in the Australian dollar after the pair popped following fourth quarter capital expenditures increasing faster than expected.
According to the Australian Bureau of Statistics, Q4 capital expenditures advanced 5.5% quarter-over-quarter, faster than calls for a 2.0% increase. Q3’s 3.9% contraction meanwhile was revised down to a 5.2% decline.
AUD/USD popped a modest 16 pips on the back of the announcement, reaching an intraday high of 0.8952 before retracing on the back of rising risk from the budget crisis in Greece.
Also of interest earlier in the day, the Australian leading economic index advanced by 0.6% month-over-month in December reversing a 0.3% contraction the month prior. There was no consensus forecast for this indicator.
Nevertheless, AUD/USD was on the back foot with the pair last trading lower by 30 pips at 0.8907 after trading in a 0.8901 to 0.8952 range so far today.
Short term resistance lies at 0.9026, 0.9030 and 0.9037 with support at 0.8879, 0.8877, and 0.8786.
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