Disappointing data from the US fails to save the Australian dollar

Disappointing data from the US was not enough to save the Australian dollar which is trading back below the US81.00 cents mark today.

At 9.10pm (AEDT) the local currency is trading at US 80.61 cents heading back down towards a new 5.5 year low.

The ISM Non-Manufacturing Index from the US came in at 56.2 significantly lower than analysts’ expectations of 58.2 and well down on Novembers reading of 59.3.

Anthony Nieves, who monitors the survey for the ISM noted,

 “There was a little bit of moderation, but overall it’s a strong report,” Economists weren’t worried about the decline since the index remains above 50.

“If the PMI’s level out at relatively high readings, it suggests that the economy continues to do well,” wrote economists at Jefferies in a research note. “It does not suggest that the economy is slowing.”

 Analysts from Fibogroup forex brokers see this as worrying sign for the Aussie dollar with further falls expected in the nearest future.

“Traders expected some support to develop and the Australian dollar to hold above the US81.00 cents level after the disappointing data from the US”

“It just goes to show that all the momentum is with the US dollar at the moment so further falls in the Aussie dollar are likely in the nearest future”.

Later today the market will await the latest FOMC minutes meeting from the US where the focus will be on the timing of an interest rate rise and depending on the tone of the Fed we could see the Australian dollar come under further pressure.