Bell FX Currency Outlook: The Australian Dollar has been under pressure the past few days following the RBA rate cut and weaker data releases. Local data released today will again provide the AUD's direction for the day session.
RBA keeps cash rate at 3 percent
Australia: The Australian Dollar has opened trading around the 1.0200 level this morning as weakening fundamentals, a cooling in exports and an increasingly dovish Central bank has weighed on the currency. The dollar traded below 1.0200 against the Greenback overnight as Australia recorded its widest trade Deficit since March 2008.
A large drop in coal and Iron ore exports saw imports exceed exports as a result recording a - $2.03 billion Deficit in August, sending the currency to its lowest level in almost a month. Domestically today Building Approvals and Retail Trade data for August is due. With Building Approvals declining 17% in July, this number has been very volatile in recent months.
Retail sales figures are expected to marginally improve; regaining some of the post-government handout slump seen in July. The recent weaker data will likely add pressure on the RBA for a further cut in interest rates at their November meeting, and a break below 1.0165 against the US dollar could see parity in sight.
Majors: Offshore markets were generally quiet overnight with equity markets posting modest gains. The biggest move was in oil prices following a report out of the US that despite fuel consumption falling, crude production has risen to its highest level since 1996.
Brent fell 2.8% to USD 108.0 per barrel, while WTI futures fell 4.0% to USD 88.0 per barrel. US equities received a boost as US private sector employment rose a solid 162k in September along with manufacturing expanding more than forecast in August.
The S&P 500 ended 0.4% higher at 1,451 while the DJIA rose 0.1% to end the session at 13,495. Spot gold prices rose modestly off the back of the better than expected US data ending the session 0.2% higher at USD 1,778 an ounce. European equities were also generally higher with the German DAX ending the session at 7,322 whilst the FTSE rose 0.3% to 5,826.
04 OCT AU Building Approvals
AU Retail Sales
EU Interest rate Announcement
US Fed Minutes
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