The Australian dollar and other risk currencies struggled to take advantage of a weaker US dollar as the other major crosses swooped in.
Firstly from the US we had underperforming core durable goods orders which unexpectedly shrank by 0.1% this month and we also had new home sales which came in on expectation but are well below July’s high. And to add to the underwhelming data a Government impasse is likely to transpire with the Senate leaving the House little time to pass a stopgap spending bill to cover the expiry of the previous one on the coming Tuesday. We saw the Euro take off and it was up to 1.3537 USD, a 70 pip gain. Gold also was well supported holding above 1333 USD an ounce with the government uncertainty fuelling demand. The Australian dollar demand however was short-lived after it hit 93.88 US cents it has retreated back 20 pips, sitting mid-range for the last 24 hours trade.
Last week’s disappointing UK retail sales data where it had its first monthly contraction for 3 months was somewhat refuted overnight. The forward looking CBI Realized Sales from the UK showed that the negative trend is unlikely to continue with the highest read since June 2012 of 34 showing future demand is on the way. The Pound put on about a cent versus the Greenback to hit a high of 1.6087 USD.
The Australian dollar is likely to be left to its own devices today with no major events in our region from an economic standpoint. The Focus will be back on the UK with GDP and the Current Account up at 6.30pm our time. And later tonight we see Unemployment Claims and GDP data from the States.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
