AUD/USD news - page 25
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AUD/USD: Aussie Hits Daily Lows as China's Stocks Extend Losses
The Australian dollar reversed overnight gains and swung to intraday losses, as falling Chinese stock markets return to focus.
China is getting the attention again, as its equity markets keep falling alongside the shifting foreign exchange policy dynamics, which fuels risk-off sentiment across the board. China's stock market has crashed more than 6% since the beginning of the week, with no real explanation apart from a fear that the world's second-biggest economy is slowing too quickly.
The so-called aussie falls 0.31% lower to fresh intraday lows of $0.7328, erasing previous gains on the back of weakening USD.
China has for a longtime been Australia's biggest trading partner, while the aussie has the biggest exposure to China among all the Asia-Pacific currencies. Concerns over the health of the world's second largest economy puts bearish pressure on the AUD.
Last week's devaluation of the CNY by the People's Bank of China (PBoC) has translated into the lowest AUD/USD since May 2009, hitting $0.7214.
On the flip side, the aussie is being supported by higher demand for safe-haven assets such as gold, which benefit from the risk-off sentiment across the markets.
AUD/USD hits fresh 6-year lows on Chinese data
The Australian dollar tumbled to fresh six-year lows against its U.S. counterpart on Monday, as Friday's weak factory data from China continued fuel concerns over global growth.
AUD/USD hit 0.7201 during late Asian trade, the pair's lowest since April 2009; the pair subsequently consolidated at 0.7238, down 1%.
The pair was likely to find support at 0.6854 and resistance at 0.7361, Friday's high.
Data on Friday showed that manufacturing activity in China contracted at the fastest rate in six-and-a-half years in August, exacerbating fears over a slowdown in the world’s second-largest economy.
The preliminary reading of the Caixin China manufacturing purchasing managers' index came in at 47.1, down from July's final reading of 47.8.
It was the weakest level since March 2009 and was well below the 50 level separating expansion from contraction.
The weak data underlined fears over the outlook for global growth.
Financial markets have been roiled since China devalued the yuan on August 11, sparking a selloff in equities, commodities and emerging-market assets.
China is Australia's biggest export partner.
The Aussie was sharply lower against the euro, with EUR/AUD jumping 1.53% at 1.5810.
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Aussie slips lower vs. broadly stronger greenback
The Australian dollar slipped lower against its U.S. counterpart on Wednesday, despite the release of strong Australian construction data, as demand for the greenback continued to be broadly supported.
AUD/USD hit 0.7097 during late Asian trade, the pair's lowest since Monday; the pair subsequently consolidated at 0.7123, easing 0.09%.
The pair was likely to find support at 0.7050, Monday's low and a six-year low and resistance at 0.7253, Tuesday's high.
The Australian Bureau of Statistics reported on Wednesday that construction work done increased by 1.6% in the second quarter, beating expectations for a 1.5% decline. Construction work done fell by 0.8% in the the first quarter, whose figure was revised from a previously estimated 2.4% drop.
But the greenback remained broadly supported after the U.S. Conference Board said on Tuesday that its index of consumer confidence jumped to a seven-month high of 101.5 this month from a reading of 91.0 in July.
The U.S. dollar was also boosted after the People’s Bank of China cut interest rates by 25 basis points to 4.6% on Tuesday, in a bid to bolster economic growth after a plunge in the country’s stock market.
The Aussie was lower against the New Zealand dollar, with AUD/NZD sliding 0.37% to 1.0972.
Also Wednesday, Statistics New Zealand reported that the trade deficit widened to NZ$649 million in July from NZ$194 million in June, whose figure was revised from a previously estimated deficit of NZ$60 million.
Analysts had expected the trade deficit to widen to NZ$750 million last month.
AUDUSD near session lows but support noted
The pair has failed to hold gains above 0.7200 and has fallen this morning to 0.7152 in what has been a general USD+ retreat
Bids/support around 0.7155 holding so far while offers remain in the rallies
Large barrier option support noted at 0.7000 and 0.6950
Monday's 6 year low of 0.7044 now the benchmark while today brings option expiries of decent size which may well be helping the cap so far
Options volatility is off its highs which suggests we may be range trading for a while yet
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AUD/USD: Aussie Drops as China Risks Weigh on Sentiment
The Australian currency moved lower against the US dollar in spite of the Reserve Bank of Australia's (RBA) decision to hold rates steady, while fears of a Chinese slowdown persisted.
The so-called aussie fell 0.43% and traded at $0.7081 against the US dollar, remaining close to the intraday low hit earlier in the session.
China's manufacturing PMIcameinat 49.7 inAugust, down from 50 inJuly, accordingtodatareleasedbytheNationalBureauofStatistics (NBS).
"While it is true that expectations were for a contraction anyway, the data just provided further confirmation that economic momentum is slowing down in China with the economy looking further exposed and increasingly vulnerable to dropping below Beijing’s 7% GDP before the end of the current quarter," said Jamel Ahmad, an analysts at FXTM.
Earlier today the RBA decided to leave the interest rate unchanged at 2.0%, where it has been since May. Following the announcement the country's currency showed no major moves and held just above $0.71 handle and not far from a six-and-a-half-year low of $0.7044.
The central bank's policymakers said they were comfortable with the level of the Australian dollar, reiterating that it is "adjusting to significant declines in key commodity prices."
"It is noteworthy that the central bank are refraining from talking down their currency on such a regular basis, and I think that the major reason behind this is because the central bank is fully aware that their currency will decline anyway with the China risks continuing," Ahmad also noted.
The focus will now shift to the Australian GDP release, with analysts predicting the economy grew 0.4% on the quarter, taking the annual rate down to 2.2% from 2.3%, the slowest rate since third quarter 2013.
"The positive news for Australia is that the RBA’s interest rate cuts earlier this year are showing signs of improving domestic data with a combination of retail sales, construction output and other releases coming in above expectations recently," Ahmad concluded.
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AUD/USD: Aussie Fights for $0.70
The US trade balance improved markedly in July. The deficit shrank from $45.2 billion to only -$41.9 billion, however, no apparent reaction was seen on the AUD/USD pair and it was hovering around the $0.70 handle, which is a strong obstacle for US dollar bulls.
"The trade balance improved sharply in July, This was a better performance than the market consensus for a more modest decline to $42.2B, and the improvement was on account of the 0.4% m/m rise in export activity and the 1.1% m/m drop in the import bill. Real trade activity also improved markedly, as the deficit declined to $56.2B from $59.0B the month before. Excluding petroleum, the real deficit dropped to $52.6B from $56.0B," Millan L.B. Mulraine, US macro strategist at TD Securities wrote on Thursday.
Moreover, initial jobless claims worsened from 270,000 to 282,000, while continuing claims slightly improved, from 2,266K to 2,257K. Both figures came out worse than analysts had expected.
Meanwhile, the services PMI for August ticked higher to 56.1 from 55.2 in July. The US dollar did not react and traders were instead focusing on the most important macro figure today -the non-manufacturing ISM for August.
The ISM report came out at 59.0, beating expectations of 58.2, but slightly decreased from July's 60.3. Nevertheless, it remains strong and points to a solid pace of expansion in the non-manufacturing sector.
On Wednesday, a somewhat weaker jobs report came out, when the US economy added 190,000 jobs in August, according to the latest ADP report, just short of the survey of 200,000. The previous month was revised down to 177,000.
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AUD/USD forecast for the week of September 7, 2015
The AUD/USD pair fell for the majority of the week, slicing through the 0.70 level. With that being the case, the market looks as if it is ready to continue going lower, and the fact that we broke down below the bottom of the hammer of course from the previous week suggest even more weakness. With this, we feel that the Australian dollar will continue to fall rather significantly, perhaps head lean down to the 0.65 level given enough time. There are various support levels between here and there though, most obviously in our book the 0.68 handle.
We believe that rallies will be sold now, and it’s only a matter of time before we see this market sell off every time it rallies. We have no interest whatsoever in trying to go long of the Aussie dollar right now, because quite frankly the commodity markets just do not have enough going for them to warrant buying a commodity currencies such as the Australian dollar.
With that being the case, the market simply cannot be bought anytime soon. I think that the US dollar will continue to be the favored currency around the world, and with that the Australian dollar doesn’t stand much of a chance. Remember that the Australians are highly leveraged to what goes on in Asia, and Asia of course is slowing down. With that being the case, the longer-term downtrend should continue for the foreseeable future.
As long as gold remains flat and limp, it’s hard to imagine the Aussie picking up. Copper prices are falling apart, which is a lesser-known correlation with the Australian dollar as well. With this, rally should be sold, at least until we get above the 0.75 level, something that isn’t going to happen anytime soon. On top of that, expect quite a bit of volatility later this week as more and more liquidity comes back into the marketplace, and the so-called “smart money” starts putting capital to work. The downtrend on this chart shows absolutely no signs of slowing down.
Forex - Aussie up in early Asia ahead of jobs, construction surveys
The Aussie ticked higher in early Asian trade on Monday ahead of surveys on construction and jobs with no other major regional data slated.
AUD/USD traded at 0.6918, up 0.14%, while USD/JPY changed hands at 119.09, up 0.06%.
In Asia with the AIG construction index, a previous reading of 47.1, and ANZ job ads in Australia.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted up 0.02% at 96.28 in early Asia. Markets in the U.S. and Canada are closed for Labor Day.
Last week, the dollar turned broadly lower on Friday after the latest U.S. employment report showed that the rate of jobs growth slowed in August, adding to uncertainty over whether the Federal Reserve will hike interest rates later this month.
The Labor Department reported that the U.S. economy added 173,000 jobs last month, slowing after an upwardly revised gain of 245,000 in July. It was the smallest increase in employment in five months and was below expectations for 220,000.
The unemployment rate ticked down to 5.1%, its lowest level since April 2008 from 5.3% in July, while average hourly wages rose by a stronger-than-expected 2.2%.
The jobs report failed to provide much clarity on when the U.S. central bank will decide to raise short term interest rates.
The dollar has come under pressure in recent weeks as slowing growth in China prompted investors to push back expectations for the timing of an initial rate hike by the Fed.
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Australia Construction Sector Swings To Expansion In August: AIG
Australia's construction sector expanded in August after contracting in the previous nine months, the latest survey from the Australian Industry Group showed on Monday.
The Ai Group/HIA Australian Performance of Construction Index,or PCI, climbed by 6.7 points to 53.8 in August from 47.1 in the previous month. Any reading above 50 indicates expansion in the sector.
The rebound in August was driven by a solid improvement in the new orders, which returned to growth for the first time in five months. The corresponding index rose notably to 57.6 in August from 45.4 in July.
Among the four construction sub-sectors, apartment building was again the strongest performer in August, although it dropped from July's 11-month of 62.0 to 58.7. House building also expanded during the month, with the index gained by 4.4 points to 54.4.
Commercial construction grew sharply in August after nine months in contraction, the respective index increased by 9.4 points from the prior month to 54.6.
At the same time, engineering construction remained negative territory for the fourteenth successive month in August amid the ongoing decline in mining-related investment.
"A healthy August update for commercial construction is encouraging, but needs to be sustained. As new housing activity remains strong rather than achieving further growth, commercial construction and infrastructure investment needs to pick up the baton. Some economic reform wouldn't go astray, either," HIA Chief Economist, Harley Dale, said.
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AUD/USD: Aussie Soars, Boosted By Labor Market Data
The aussie was seen around 0.8% higher, changing hands at around $0.7070 during the London session on Thursday, supported mainly by somewhat positive labor market news.
The Australian jobs market saw 17,400 people added to the workforce in August, much more than the initially expected 5,000. What's more, the unemployment rate declined to 6.2% from last month's 6.3%, providing some relief for the aussie.
In addition to this, Chinese inflation indices came out mixed during the Asian session. Chinese CPI for August year-on-year improved from 1.6% to 2.0%, while the PPI gauge for August decelerated further to -5.9%, from -5.4% in July.
"This is bad news for Chinese businesses, given that wages are closely tied to developments in the CPI, whereas the prices of output are more closely related to the PPI. The diverging trends in both indices are thus another concern for manufacturers," analysts at Rabobank wrote on Thursday.
The technical outlook is still bearish as long as bears hold the key horizontal resistance of $0.7080.
The Australian dollar received some support from copper, which miraculously recovered and soared nearly 10% from September's lows and managed to cancel the bearish trend, when it broke above some important resistance area of $2.42.
From the US dollar point of view, not much is going on. Jobless claims, along with wholesale inventories are due later in the session, but are not expected to spur any significant volatility.
Data of more importance will come on Friday, when the US will release PPI indices, followed by the University of Michigan consumer confidence gauge. However, everyone is focused on next week's Federal Open Market Committee meeting, so most of the bigger investors will rather stay out of the markets till Wednesday.
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