The Australian dollar dropped against its major counterparts in the European session on Wednesday, amid concerns over the possibility of further interest rate hikes by the Federal Reserve, which may weaken growth outlook.
Strong economic data from the U.S. increased the likelihood that the Fed will have to tighten monetary policy further to counter inflation.
The Fed will release the minutes of its latest meeting later today, which could shed some light on future rate-hike trajectory.
Data from the Australia Bureau of Statistics showed that Australia wage price index rose a seasonally adjusted 0.8 percent on quarter in the fourth quarter of 2022.
That was shy of expectations for an increase of 1.0 percent, which would have been unchanged from the three months prior.
The aussie fell to 5-day lows of 0.6811 against the greenback and 0.9232 against the loonie, after climbing to 0.6865 and 0.9290, respectively in early deals. The next likely support for the aussie is seen around 0.66 against the greenback and 0.91 against the loonie.
The aussie touched 1.5634 against the euro, its weakest level since February 6. The aussie may find support around the 1.59 level, if it drops again.
The aussie declined to 8-day lows of 91.85 against the yen and 1.0950 against the kiwi, from its early highs of 92.69 and 1.1041, respectively. The aussie is poised to challenge support around 90.00 against the yen and 1.07 against the kiwi.
Looking ahead, the Fed minutes from the January 31- February 1 meeting will be published at 2:00 pm ET.
