Australian Dollar Falls After Weak GDP Data
December 04 2018 - 9:02PM
RTTF2
The Australian dollar slipped against its major counterparts in
the Asian session on Wednesday, after a data showed that nation's
economy grew less than expected in the third quarter.
Data from the Australian Bureau of Statistics showed that
Australia's GDP rose a seasonally adjusted 0.3 percent on quarter
in the third quarter.
That missed expectations for an increase of 0.6 percent and was
down from 0.9 percent in the second quarter.
On a yearly basis, GDP expanded 2.8 percent - again missing
forecasts for 3.3 percent and down from 3.4 percent in the three
months prior.
The currency was weighed by risk aversion as a yield curve
inversion, or short-term debt yields trading above longer-term debt
yields, stoked fears about an upcoming economic slowdown. Mounting
skepticism about the trade war truce reached between U.S. President
Donald Trump and Chinese President Xi Jinping also weighed on the
markets.
The aussie dropped to a weekly low of 0.7282 against the
greenback, from a high of 0.7356 seen at 7:05 pm ET. On the
downside, 0.71 is seen as the next likely support level for the
aussie.
Having climbed to 82.99 against the yen at 7:25 pm ET, the
aussie reversed direction and slipped to a weekly low of 82.28. The
aussie is poised to find support around the 81.00 mark.
The latest survey from Nikkei showed that Japan services sector
continued to expand in November, albeit at a fractionally slower
pace, with a PMI score of 52.3.
That's down from 52.4 in October, although it remains well above
the boom-or-bust line of 50 that separates expansion from
contraction.
The aussie weakened to a 5-day low of 1.5548 against the euro,
after rising to 1.5422 at 7:05 pm ET. The aussie is seen finding
support around the 1.58 mark.
The aussie hit a weekly low of 0.9678 against the loonie, off
its early 2-day high of 0.9749. The next possible support for the
aussie is seen around the 0.95 level.
The aussie declined to an 8-month low of 1.0525 against the kiwi
and held steady thereafter. At yesterday's close, the pair was
worth 1.0589.
Looking ahead, PMIs from major European economies and Eurozone
retail sales for October are due in the European session.
At 8:15 am ET, ADP private payrolls data for November is
scheduled for release.
The Bank of Canada announces its interest rate decision at 10:00
am ET. Economists forecast the benchmark rate to remain unchanged
at 1.75 percent.
Simultaneously, U.S. ISM non-manufacturing composite index for
November is set for release.
The Federal Reserve's Biege book report is due at 2:00 pm
ET.
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