AUD slips below 0.6400
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Aussie drops as risk appetite diminishes |
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US Manufacturing report falls to a 26 year low |
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RBA releases their interest rate decision at 2.30pm AEDT |
Market Update
Weak US data caused the Aussie to tumble early this morning as high yielding currencies took the brunt of risk adverse trades. After reaching a top of 0.6482 overnight, the Aussie fell a cent against the greenback as worries over global growth increased.
The Institute for Supply Management's US Manufacturing report showed activity fell to 36.2 points in November, the lowest reading in 26 years. This stirred up talk of a US recession as a reading below 50 is evidence of a contraction.
US Federal Reserve chairman Ben Bernanke announced overnight the Fed will increase the supply of USD by buying more treasury notes. He advised the economy were under "considerable strain" and they would take measures to aid the economy.
Local retail sales data will be released today at 11.30am AEDT. It is expected to decline by 0.4%, if the result is worse than expected the Aussie could fall further. All eyes will be on the RBA announcement today at 2.30pm AEDT. A 100 basis point looks to be already priced into the market. If the rates are cut by a smaller amount (50 or 75 points) the Aussie could strengthen.
Trading Range
0.6340-0.6460
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Current Weeks Releases
| Local Data |
Due |
Exp |
Prev |
|
Performance of Manufacturing Index
|
Mon |
|
40.4 |
| Company Operating Profit (3Q) |
Mon |
3.0% |
14.3% |
| Current Account Balance (3Q) |
Tue |
-11.1B |
-12.7B |
| Retail Sales (Mom OCT) |
Tue |
-0.2% |
-1.1% |
| RBA Interest Rate Decision |
Tue |
4.5% |
5.3% |
| GDP (QoQ 3Q) |
Wed |
0.2% |
0.3% |
| Trade Balance (OCT) |
Thur |
1.41B |
1.46B |
| International Data |
Due |
Exp |
Prev |
| US ISM Manufacturing (NOV) |
Mon |
37.5 |
38.9 |
| EU EZ Retail Sales (MoM OCT) |
Wed |
-0.4% |
-0.2% |
| NZ RBNZ Interest Rate Decision |
Thur |
5.00% |
6.50% |
| EU EZ GDP (QoQ 3Q) |
Thur |
-0.2% |
-0.2% |
| GBP BOE Interest Rate Decision |
Thur |
2.00% |
3.00% |
| EU European Interest Rate Decision |
Thur |
2.75% |
3.25% |
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| By Michelle Dri, Senior Corporate Foreign Exchange Dealer |
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