RBA Governor Steven’s comments yesterday morning continued to weigh heavily on Australian dollar sentiment through trade overnight and it fell steadily through all sessions versus the Greenback. It’s trading at 94.82 US cents, down just shy of one cent from his speech yesterday and about 10 pips off the low from a few hours ago. The Euro however took off after the release of softer US data as retail sales came in at -0.1% and consumer confidence data also missed expectations at 71.2 helping the Euro back above 1.38 USD. The strength however was short lived with US dollar support helping stript 60 pips back in quick time to see the Euro this morning at 1.3747 USD.
The US dollar moves against the other majors was more uniform as UK mortgage and lending level releases did not spark any support for the Pound which was weaker and is now 1.5 cents lower than it traded on Monday. Gold trading momentum also came to an end with it dropping 20 dollars from yesterday high to hit lows of 1340 USD an ounce, similar to the Euro it got a short term bounce of the US data misses before resuming falling.
Today’s local session is likely to see the Australian dollar remain under some selling pressure as markets look to tonight’s FOMC meeting as the key risk barometer going forward. The market will be hit with CPI and jobs data for the States in the lead, but those releases are likely to have an effect following the comments made by Bernanke and how the data is view from the Fed perspective.
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
