AUD/USD Drifts Below 0.71 After Resistance from 0.72

The Australian dollar has tumbled below US71c in offshore trade as a broad commodities sell-off afflicted the local currency. At 7am (AEST), the unit is trading at US70.91c, down sharply from US71.52c yesterday. The currency dipped as low as US70.56c, before gaining ground near the end of the US session as stocks pared losses.

The fall came as commodities tumbled across the board, with copper sinking 3.6 per cent, US crude losing 1.8 per cent and zinc slipping to a six-year low as investors bet on the release of weak Chinese manufacturing data later today. Typical safe haven gold was also down 0.7 per cent.

The action hurt resource-driven and growth-oriented currencies such as the Australian dollar, with further pain coming from a steady bid on the US dollar as traders appeared more confident in a 2015 rate hike based on Fed commentary since last week’s decision to hold. Beyond the Australian dollar, miners were hit hard on stock exchanges, with London-listed stock of BHP Billiton and Rio Tinto tumbling 5.1 per cent and 3.5 per cent, respectively.

The Australian