2019.09.2507:09:00UTC+00Australian Dollar Falls As U.S. Political Uncertainty Dampens Sentiment

The Australian dollar declined against its major counterparts in the European session on Wednesday, as European shares fell on U.S. political uncertainty, after House democrats launched a formal impeachment inquiry into President Donald Trump.

Trump criticism of China's trade practices at the United National General Assembly on Tuesday also fueled pessimism about the prospect of a trade truce between the world's two largest economies.

Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale," Trump said at the United National Assembly.

"I will not accept a bad deal with the American people," he added.

House Speaker Nancy Pelosi announced a formal impeachment inquiry into President Donald Trump in the wake of allegations that he had pressured Ukraine's government to investigate Democratic rival Joe Biden.

The currency has been trading lower against its major counterparts in the Asian session.

The aussie declined to 0.6773 against the greenback, from a high of 0.6804 hit at 10:30 pm ET. The next possible support for the aussie is seen around the 0.625 level.

The aussie fell to a 2-day low of 72.64 against the yen from Tuesday's closing value of 72.81. Should the aussie drops further, 71.00 is likely seen as its next support level.

Data from the Bank of Japan showed that producer prices in Japan were unchanged in August - in line with expectations following the upwardly revised 0.2 percent increase in July.

On a yearly basis, producer prices were up 0.6 percent - exceeding forecasts for 0.5 percent but unchanged from the July reading following an upward revision from 0.5 percent.

The Australian currency that finished Tuesday's trading at 1.6202 against the euro weakened to 1.6239. The aussie is seen finding support around the 1.65 region.

The aussie reached as low as 0.8981 against the loonie, compared to 0.9005 hit late New York Tuesday. Next initial support for the aussie is seen around the 0.87 region.

The aussie held steady against the kiwi, after having dropped to 1.0702 in the Asian session, which was its lowest level since September 12. At Tuesday's close, the pair was worth 1.0753.

New Zealand's central bank left its key interest rate unchanged after cutting the rate by 50 basis points in August.

The Monetary Policy Committee of Reserve Bank of New Zealand headed by Adrian Orr decided to hold the Official Cash Rate at 1.0 percent.

Looking ahead, the U.S. new home sales for August will be featured in the New York session.