The Australian dollar hit a 2-1/2-month low on Wednesday after disappointing third-quarter growth data led investors to sell more of the currency that was already entrenched in a downtrend. The Australian dollar slumped over half a cent to a low of $0.9536 after data showed the economy grew a meagre 0.2 percent in the third quarter, short of forecasts for 0.5 percent growth.
Although it crawled off lows by late trade to stand at $0.9586, helped in part by firm Chinese manufacturing data, it was still some 5 percent under a 28-year high of $1.0085 hit on November 5. The spill in the Aussie dollar took a toll on the New Zealand dollar. It was briefly dragged to support levels around $0.7400, but rebounded in late trade to $0.7439.
While most analysts said Australia's economy would soon re-accelerate as consumption and business investment pick up, some thought the soft data would at least affirm bets Australia would not get an interest rate hike before mid-2011. Underscoring the Aussie dollar's bright outlook, the euro struggled at A$1.3578 in late trade, within spitting distance of a record low of A$1.3515 hit earlier in the day.