The Australian dollar extended losses against the Japanese yen, falling to a one-month low, but managed to cling to 76 US cents as investors await US trade data later on Wednesday. The Aussie joined the US dollar and euro in falling sharply versus the Japanese currency after a European Central Bank official said Asia must do its share to bear the brunt of a weaker US dollar.
The Aussie sank to a one-month low of 78.49 yen. Chartists said the pairing threatened to break a "head-and-shoulders" graph formation dating back to September 23. In theory, a convincing break below the "neckline" of that formation, at around 78.50, could see the Aussie plummet to around 75.20/50 yen, or 300 basis points - the distance between the bottom of the "shoulders" and the top of the "head." The Aussie fared better against other currencies such as the euro and the US dollar, which came under broad pressure ahead of the trade data.
The median forecast is for a deficit of $54 billion in November, just off the record $55.46 billion shortfall in October. The Aussie traded at $0.7602/07, little changed from $0.7605/10 late on Tuesday. The currency had touched a three-week low of $0.7540 on Friday.
Data on Wednesday showed Australian consumer sentiment leapt to its highest in more than a decade in January while job vacancies for the three months to end-November leapt 17.2 percent.
However, with retail sales coming in weaker-than-expected in the five months to November, some economists said future readings may not be so rosy as housing activity slows after a long boom.