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.
Recommended Content
Editors’ Picks
AUD/USD: Uptrend remains capped by 0.6650
AUD/USD could not sustain the multi-session march north and faltered once again ahead of the 0.6650 region on the back of the strong rebound in the Greenback and the prevailing risk-off mood.
EUR/USD meets a tough barrier around 1.0800
The resurgence of the bid bias in the Greenback weighed on the risk-linked assets and motivated EUR/USD to retreat to the 1.0750 region after another failed attempt to retest the 1.0800 zone.
Gold eases toward $2,310 amid a better market mood
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Bitcoin price coils up for 20% climb, Standard Chartered forecasts more gains for BTC
Bitcoin (BTC) price remains devoid of directional bias, trading sideways as part of a horizontal chop. However, this may be short-lived as BTC price action consolidates in a bullish reversal pattern on the one-day time frame.
What does stagflation mean for commodity prices?
What a difference a quarter makes. The Federal Reserve rang in 2024 with a bout of optimism that inflation was coming down to their 2% target. But that optimism has now evaporated as the reality of stickier-than-expected inflation becomes more evident.