Aussie dollar trades sideways, eyeing falls

The Australian dollar has traded sideways despite the greenback's moves higher overnight, however the support could be short lived with the release of key economic data and looming falls in commodities.

At the Asian open on Wednesday, the Australian dollar was trading at 75.48 U.S. cents, up from 75.40 U.S. cents at Tuesday's close.

"The Australian dollar continues to show resilience despite the U.S. dollar bull run and yesterday's 6 U.S. dollar per ton fall in iron ore futures," Commonwealth Bank of Australia currency strategist and international economist Joseph Capurso said in a note.

The U.S. dollar continued to rally overnight following positive October sales data and speeches from key U.S. Federal Reserve members, however the support for the local unit is short lived with markets eyeing further falls in key commodities.

"When that happens in earnest the Australian dollar will likely ease, though we suspect market participants have largely discounted the recent surge in prices," Capurso said.

Wednesday's release of the third quarter wage price index and the October employment report however will also be sensitive for local interest rate expectations, thus the Australian dollar.

"Soft employment conditions and/or weaker wage growth could raise odds of another Reserve Bank of Australia rate cut and curtail the Australian dollar upside," Capurso said.

"But the high level of commodity prices is a powerful offset to lower rates and supports AUD for now."

At 1034 local time (AEDT), the Australian dollar was trading at 75.49 U.S. cents. Endit