Investing.com - The Australian dollar moved lower against the U.S. dollar Thursday, as the safe-haven greenback saw heightened interest in light of an Italian bond market that threatened to drag the country into the region’s debt crisis.
AUD/USD hit 1.0109 in early Asian trade, the pair’s lowest since October 13; the pair subsequently consolidated at 1.0117, falling 0.27%.
The pair was likely to find support at 0.9866, the low of October 12, and resistance at 1.0397, last Tuesday’s high.
A day after the announced resignation of Italian Prime Minister Silvio Berlusconi Italian bonds rose above 7%, the same level at which Ireland, Portugal and Greece were forced to plead for rescue funds from international agencies.
A new Italian government faces implementation of deficit reduction measures to help tackle the nation’s public debt, currently at 120% of gross domestic product, second to Greece among euro-zone members.
Prime Minister Berlusconi, Tuesday, said he would resign once parliament passed the austerity bill, a USD63 billion package that convinced the European Central Bank to buy Italian bonds in an effort to reduce borrowing costs.
Shares on Wall Street tumbled on the prospects of an Italian default, with the Dow Jones Industrial Average slumping 3.2%, the Nasdaq Composite Index sank 3.9%, and the S&P 500 plummeted 3.7%.
Earlier Wednesday, Australia’s Bureau of Statistics reported that the nation’s unemployment rate remained unchanged in October at a seasonally adjusted 5.2%, unchanged from the previous month.
Market expectations were for the jobless rate to rise to 5.3% last month.
The number of Australians in full-time work rose 20,000 to 8.07 million, while the number of those in part-time positions fell 9,900 to 3.4 million, according to the bureau.
In a separate report, the bureau said that new home loan approvals in Australia rose more than expected in September by a seasonally adjusted 2.2%, outpacing forecasts of a 1.5% gain.
In Sydney, Australian shares traded sharply lower in early Thursday trade, with the benchmark S&P/ASX 200 sinking 2.92% to 4,219.05.
Meanwhile, the Australian dollar was lower against both the euro and the Japanese yen, with EUR/AUD rising 0.05% to hit 1.3355, and AUD/JPY down 0.15% to hit 78.79.
The U.S. Department of Labor was scheduled to release its latest weekly figures on initial and continuing jobless claims later Thursday.