Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

AUD/USD Hit By Weak GDP Data, Asian Equities Lower

Published 09/02/2015, 05:18 AM
Updated 03/07/2022, 05:10 AM
EUR/USD
-
GBP/USD
-
USD/JPY
-
USD/CHF
-
AUD/USD
-
USD/CAD
-
NZD/USD
-
JP225
-
HK50
-
DX
-
CL
-
SSEC
-
TOPX
-
SZSC
-

Market Brief

Canada’s June GDP surprised to the upside yesterday as it came in at 0.5%m/m versus 0.2% median forecast and -0.2% previous reading while the economy contracted by 0.5% saar during the second quarter, better than estimate of -1%. USD/CAD dropped more than 1 figure on the headline, reaching 1.3119. However, the respite was short-lived for the loonie due to increase pressure on crude oil prices and weak manufacturing data in August. According to the RBC, the Canadian manufacturing sector entered a contraction phase in August as the PMI printed at 49.4 compared to 50.8 in July. We think that the odds of a rate cut from the RBC have increased significantly and we therefore maintain our negative bias on the CAD ahead of RBC rate decision due next week.

G10 Advancers

A fresh batch of US data has been made available yesterday. Unfortunately we got no clear signal from the manufacturing sector as the Markit PMI came in at 53 above median forecast and previous read (both at 52.9) while the ISM manufacturing PMI printed at 51.1 versus 52.5 consensus and 52.7 previous read. On the bright side, construction spending rose 0.7%m/m in July, beating market expectations of 0.6%. The single currency is gaining ground on the dollar as the currency pair is back around 1.13, above the 1.1262 threshold implied by the 50% Fibonacci level (on July-August rally).

The Australian economy is not in such a great shape as it expanded by only 0.2%q/q (s.a.) while market participants were looking for a growth figure of 0.4%, this is the weaker result since Q1 2013. The Aussie lost more than 1% against the dollar since yesterday and moved quickly below 0.70 before bouncing back around 0.7030. All in all, the weak data are boosting speculation for another rate cut by the RBA. Traders are now pricing a 50-50 chance of a rate cut at the November meeting, meaning that there is room for further Aussie depreciation against the USD.

On the equity side, Asia regional equity markets are trading into negative territory, again. The Shanghai Composite is down -1.61%, Shenzhen -2.48% while in Hong Kong the Hang Seng retreats -0.99%. In Japan, the Nikkei 225 lost 0.39% and the TOPIX -0.82%. Australian shares edged higher by 0.10% and in New Zealand the S&P/NZX index dropped 1.15% after data indicated that commodity prices fell 5.2% in August. NZD/USD is treading water around 0.6350, slightly below the key level lying at 0.6403 (Fibo 61.8% on March 2009-July 2011).

Today traders will be watching MBA mortgage application ADP unemployment change and factory orders from the US; Markit/CIPS construction PMI from UK; industrial production and Selic rate decision from Brazil.

Today's Calendar

Currency Tech
EUR/USD
R 2: 1.1871
R 1: 1.1714
CURRENT: 1.1257
S 1: 1.1017
S 2: 1.0809

GBP/USD
R 2: 1.5930
R 1: 1.5803
CURRENT: 1.5285
S 1: 1.5330
S 2: 1.5171

USD/JPY
R 2: 135.15
R 1: 125.86
CURRENT: 120.14
S 1: 115.57
S 2: 113.86

USD/CHF
R 2: 0.9904
R 1: 0.9799
CURRENT: 0.9646
S 1: 0.9151
S 2: 0.9072

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.