Australian Dollar Extends Slide

The Australian dollar continued to be weaker against the other major currencies in the Asian session on Thursday, with the latest negative trigger being the weak trade balance data, which added on to the worries triggered by slumping iron ore prices and growing expectation of an interest rate cut by the Reserve Bank of Australia next week.

Data from the Australian Bureau of Statistics showed that Australia had a seasonally adjusted merchandise trade deficit of A$1.256 billion in February. This was smaller than the shortfall of A$1.30 billion expected by economists, but was wider than the A$980 million deficit in January.

Exports were up 1.0 percent on month to A$27.874 billion, while imports added 2.0 percent to A$29.129 billion.

Iron ore prices fell below the US$50 a ton mark for the first time in a decade.

Additionally, economists expect another interest rate cut again to a new record low of 2 percent at the nation's central bank's upcoming meeting. In February, it cut the cash rate to a record low of 2.25 percent, while also indicating that further easing may be needed at its March meeting. Further, uncertainty concerning the U.S. Federal Reserve's monetary policy normalization schedule has also been weighing down on the aussie in recent sessions.

Wednesday, the Australian dollar fell 0.09 percent against the U.S. dollar, 0.40 percent against the yen, 2.09 percent against the euro and 0.59 percent against the Canadian dollar.

In the Asian session today, the Australian dollar fell to nearly a 3-month low of 0.9546 against the Canadian dollar and a 2-month low of 90.52 against the yen, from yesterday's closing quotes of 0.9588 and 90.98, respectively. If the aussie extends its downtrend, it is likely to find support around 0.94 against the loonie and 89.00 against the yen.

Against the euro and the U.S. dollar, the aussie dropped to a 4-week low of 1.4220 against the euro and more than a 3-week low of 0.7567 against the U.S. dollar from yesterday's closing quotes of 1.4161 and 0.7598, respectively. The aussie may test support near 1.43 against the euro and 0.74 against the greenback.

The aussie slipped to a 2-day low of 1.1016 against the NZ dollar, from yesterday's closing value of 1.0193. On the downside, 1.00 is seen as the next support level for the aussie.

Looking ahead, U.K. Markit/CIPS construction PMI for March is due to be released in the European session.

In the New York session, Canada merchandise trade data for February, U.S. weekly jobless claims for the week ended March 28 and U.S. trade balance and factory orders - both for February are slated for release.

At 3:45 pm ET, U.S. Federal Reserve Governor Lael Brainard is expected to speak at the Ninth Biennial Federal Reserve System Community Development Research Conference in Washington DC.