The Australian dollar is still levelling off after its recent falls, getting support from some encouraging European economic data.

At 0700 AEST on Wednesday, the local unit was trading at 87.50 US cents, slightly down from 87.55 cents on Tuesday.

Euro zone unemployment remained steady at a near record 11.5 per cent in August, and the inflation rate eased to 0.3 per cent in September, the lowest in nearly five years, official figures showed.

Bank of New Zealand strategist, Kymberly Martin, said the data helped the euro rebound and helped support other currencies like the Australian dollar.

“Northern European and Antipodean currencies outperformed,” she said.

Martin said that trade in the Australian dollar is a little cautious ahead of the release of local retail spending figures and Chinese purchasing managers’ index manufacturing data for September.

“The Australian dollar will likely take its cues from Australian data releases and the China PMI,” she said.

“A solid PMI reading would likely benefit the Australian dollar.”

AAP

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