Bell FX Currency Outlook: The Australian Dollar is slightly lower amid more signs that the US economic recovery may not be all that strong.
An employee counts U.S. dollar banknotes as yuan banknotes are seen at a branch of the Industrial and Commercial Bank of China in Huaibei, Anhui province in this May 25, 2010 file photo.
Australia: The AUD is trading at around USD 0.9390, down from 0.9413 cents yesterday. Overnight, data showed that the US consumer confidence index declined to 79.7, the weakest since May. The data added to uncertainty about when the US Federal Reserve will start to taper its economic stimulus program. The Fed surprised the market last week when it said it would keep the program going in full. It seems the AUD was still inclined to drift lower after the US Federal Reserve's no taper decision last week. There has been extreme showing of sentiment towards the markets believing the US is recovering a lot quicker than it actually is. What is not in doubt is speculation on the Federal Reserve's further decisions dominating markets for the rest of the week because there are many speeches to come from Fed committee members. The market feels it will be economic data that tells if the AUD will either drift towards 0.9000 or whether we may be set to head back higher to 0.9500. In Australia today, the RBA will release its semi-annual Financial Stability Review at 11:30AEST. The RBA's view has been that the rise in house prices to date is orderly.
Majors: In currency markets, it was another night of subdued price action, with the USD modestly stronger against the higher yielding currencies. The AUD and NZD both edged lower, with the NZD underperforming as short-term types unwound long positions established after yesterday's bright Fonterra payout estimate for the coming year. The raft of central bank speeches did not change tack on recent policy direction and markets were content to let flows dictate direction. Today in Asia, it should again be another quiet session and markets will likely look towards tomorrow night and the US GDP release for the first hint of direction.
25 SEPT AU Financial Stability Review
US Durable Goods Order
US New Home Sales
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