You are here

Australian dollar near 1-month lows, kiwi boosted by business confidence

Wednesday, August 31, 2016 - 13:43

28410016 - 24_06_2013 - haven25.jpg
The Australian dollar traded near one-month lows on Wednesday after upbeat US data added to the risk of a near-term rate hike by the Federal Reserve.

[SYDNEY] The Australian dollar traded near one-month lows on Wednesday after upbeat US data added to the risk of a near-term rate hike by the Federal Reserve.

The Australian dollar held at US$0.7521, after touching US$0.7500 on Tuesday, its lowest since Aug 2.

The Aussie has been on a downtrend since hitting a near 3-1/2 month high of US$0.7760 earlier in August. It is now trading below a key support of around US$0.7530, and could hit US$0.7450, a level last visited on July 27.

"The Australian dollar is near the bottom of the FX leader board, a fairly typical occurrence during episodes of broad-based US dollar strength," said Ray Attrill, global co-head of FX strategy at National Australia Bank.

Powered by GET.comGetCom
sentifi.com

Market voices on:

The greenback received a boost on Tuesday after the Conference Board said its consumer confidence index rose to an 11-month high in August. Other data showed that house price growth moderated in June but still remaining strong.

The upbeat news followed Fed Chair Janet Yellen's comment last week that the case for a rate increase was strengthening.

ADP employment data and the Chicago purchasing managers' index (PMI) due later on Wednesday will help refine forecasts for the key August non-farm payrolls report on Friday.

In Australia, the focus will be on capital expenditure and retail sales numbers - both market sensitive releases - due on Thursday.

The New Zealand dollar was holding up better than its antipodean cousin, rising to US$0.7244, from US$0.7217.

The kiwi found support from upbeat business confidence data.

The private survey by ANZ bank showed that although business sentiment had slipped slightly in August, firms' outlook for their own activity had risen.

The kiwi also gained against the Aussie, which slipped over half a US cent to a seven-week trough of NZ$1.0376 and broke chart support at NZ$1.0400 in the process.

"That level has represented an area of technical resistance to the kiwi since early June so it might be tough going to push higher over the near term," said BNZ currency strategist Jason Wong.

Australian government bond futures were mixed, with the three-year bond contract up 1 tick at 98.62. The 10-year contract was unchanged at 98.1500.

REUTERS

Powered by GET.comGetCom