AUD/USD drops to 2-1/2 week lows after Australian data

The Australian dollar dropped to two-and-a-half week lows against its U.S. counterpart on Wednesday, after lower than expected inflation data from Australia and a tepid manufacturing report out of China.

AUD/USD hit 0.9273 during late Asian trade, the pair's lowest since April 8; the pair subsequently consolidated at 0.9283, retreating 0.89%.

The pair was likely to find support at 0.9230, the low of April 4 and resistance at 0.9378, Tuesday's high.

Official data showed that consumer price inflation in Australia rose 0.6% in the first quarter, below expectations for a 0.8% increase, after a 0.8% rise in the three months to December.

Elsewhere, data showed that the preliminary reading of China’s HSBC manufacturing purchasing managers’ index came in at 48.3 this month, up slightly from a final reading of 48.0 in March, but still below the 50 line separating expansion from contraction.

China is Australia's biggest export partner.

The Aussie was sharply lower against the euro, with EUR/AUD jumping 1.06% to 1.4895.

Later in the day, the U.S. was to publish reports on new home sales and manufacturing activity.