Aussie Drops As Australia's Inflation Misses Expectations

The Australian dollar fell against its major counterparts in the Asian session on Wednesday, as the nation's inflation rose less than expected in the second quarter.

Data from the Australian Bureau of Statistics showed that Australia's consumer prices rose 6.1 percent in the second quarter, compared to 5.1 percent in the first quarter. Inflation was forecast to climb to 6.2 percent.

The data reduced expectations for a supersized 75 basis point rate hike from the Reserve Bank of Australia when it meets next week.

Economists now expect the RBA to raise the key rate by 50 basis points to 1.85 percent in August.

Traders awaited the Federal Reserve's policy announcement due later today, when it is expected to deliver another 75 basis point hike.

The aussie was down against the greenback and the loonie, touching 2-day lows of 0.6913 and 0.8901, respectively. The aussie is likely to face support around 0.68 against the greenback and 0.87 against the loonie.

Reversing from its early highs of 1.4569 against the euro and 1.1140 against the kiwi, the aussie edged down to 1.4668 and 1.1094, respectively. The aussie is seen finding support around 1.48 against the euro and 1.09 against the kiwi.

The aussie pulled back from an early 5-day high of 95.32 against the yen, dropping to 94.75. Next key support for the aussie is likely seen around the 90.5 level.

Looking ahead, U.S. durable goods orders, advance goods trade balance, wholesale inventories and pending home sales, all for June, are due out in the New York session.

At 2:00 pm ET, the Fed announces its decision on interest rate. Economists widely expect the Fed to raise rates by 75 basis points to 2.5 percent from 1.75 percent.