Investing.com - The Australian dollar moved lower against the U.S. dollar Tuesday, following gains on Wall Street and hopes for progress on European debt after the announced resignation of Greece’s prime minister.
AUD/USD hit 1.0347 in early Asian trade, the pair’s lowest since Monday; the pair subsequently consolidated at 1.0363, declining 0.14%.
The pair was likely to find support at 1.0204, last Thursday’s low, and resistance at 1.0446, last Thursday’s high.
Over the weekend, Greek Prime Minister George Papandreou agreed to resign, leaving the door open for the creation of a new government that could better secure international funds and avoid default on the country’s debt.
On Monday, Greece’s Finance Minister Evangelos Venizelos held talks with European Union Economic and Monetary Affairs Commissioner Olli Rehn to negotiate payment of Greece’s next tranche of financial aid.
European finance officials met in Brussels on plans to expand the European Financial Stability Facility, the rescue fund for debt-threatened euro-zone members.
Meanwhile, rumors continued to circulate that Italian Prime Minister Silvio Berlusconi would be the next European leader to step down, as 10-year Italian bonds surged to their highest level since the launch of the single-currency euro. Berlusconi denied he would be resigning.
Wall Street dealers took a generally positive view of events in Europe, with the Dow Jones Industrial Average gaining 0.71% to 12,068.40, the Nasdaq Composite Index added 0.34% to 2,695.25, and the S&P 500 rose 0.63% to close at 1,261.12.
Meanwhile, the Australian Bureau of Statistics reported Tuesday that the nation’s trade surplus in September stood at AUD2.56 billion, down from AUD2.95 in August. Market expectations were for a AUD3 billion figure for the period.
The ABS said that exports fell 3% while imports declined by 1% in September.
Also Tuesday, the National Australia Bank business confidence survey rebounded to 2 in October from minus 2 in September. The NAB said the results were consistent with underlying demand and expectations of a 3.25% increase in gross domestic product for the quarter ending December 31.
The Reserve Bank of Australia voted to cut interest rates by 25 basis points, to 4.5%, at its November 1 board meeting.
In Sydney, Australian shares moved higher in early Tuesday trade, on strength in mining and healthcare issues, with the benchmark S&P/ASX 200 rising 0.12% to 4,278.60.
Meanwhile, the Australian dollar was lower against both the euro and the Japanese yen, with EUR/AUD rising 0.02% to hit 1.3273, and AUD/JPY down 0.13% to hit 80.88.
Australia’s Westpac Consumer Sentiment index of spender confidence was due out on Wednesday.