Investing.com – The Australian dollar fell against US dollar after an industry survey showed a drop in construction activity in December.
The Australian Industry Group Construction Index that rates the relative level of business conditions among construction companies was down to 50.8 in December against the earlier figure of 55.2. Commenting on the figure, AIG Group Director, Public Policy, Peter Burn said that, “low interest rates are clearly having their long awaited impact and the continued growth of new orders means that builders - and the manufacturing and service industries that are linked to the commercial and residential construction sectors - can look forward to 2014 with a greater degree of confidence than prevailed only a few months ago."
AUD/USD traded at 0.8918, down 0.08%, while USD/JPY traded at 104.69 up 0.10% and NZD/USD was down 0.07% at 0.8278.
Elsewhere the greenback moved higher against most major currencies after data revealed the U.S. trade gap narrowed unexpectedly in November, sparking hopes the economy is improving and in less need of monetary support from the Federal Reserve.
EUR/USD was flat at 1.3615.
Demand for the greenback jumped after the Commerce Department said the U.S. trade deficit narrowed to USD34.25 billion in November from a revised deficit of USD39.33 billion in the previous month.
Economists were expecting the U.S. trade deficit to widen to USD40 billion.
U.S. exports rose 0.9% to a record high of USD194.9 billion, while imports fell 1.4% to USD229.1 billion.
Investors applauded the data but remained cautious ahead of the release of the Federal Reserve’s December meeting minutes on Wednesday as well as Friday’s U.S. December jobs report, with many eager to see fresh indications on the possible timing of further Fed stimulus tapering.
The Federal Reserve is currently buying USD75 billion in Treasury holdings and mortgage debt a month to spur recovery by suppressing long-term borrowing costs, which weakens the dollar as a side effect.
Monetary authorities have said they'll pay close attention to economic indicators when deciding the fate of stimulus measures.
Meanwhile in Europe, the yield on Irish 10-year government bond fell to its lowest level since 2009 following strong demand at auction, the country’s first offering since it exited its bailout last month.
Dampening spirits, however, was a report revealing that the annual rate of inflation in the euro zone slowed to 0.8% in December from 0.9% the previous month, which stoked deflationary concerns that softened demand for the single currency.
In Germany the data showed that the number of people out of work fell by 15,000 in December to 2.96 million, beating expectations for a decline of 1,000.
The country’s unemployment rate remained steady at 6.9%.
A separate report showed that German retail sales rose 1.5% in November, more than double expectations for an increase of 0.6%.
The greenback was down slightly against the pound, with GBP/USD up 0.02% at 1.6397.
The dollar was up against the Swiss franc, with USD/CHF up 0.01% at 0.9091 and was up against its cousins in Canada with USD/CAD up 0.04% at 1.0769.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 81.01.
On Wednesday, the U.S. is to release the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days.
Investors will also pay close attention to the Federal Reserve's minutes of its latest policy meeting.
The Australian Industry Group Construction Index that rates the relative level of business conditions among construction companies was down to 50.8 in December against the earlier figure of 55.2. Commenting on the figure, AIG Group Director, Public Policy, Peter Burn said that, “low interest rates are clearly having their long awaited impact and the continued growth of new orders means that builders - and the manufacturing and service industries that are linked to the commercial and residential construction sectors - can look forward to 2014 with a greater degree of confidence than prevailed only a few months ago."
AUD/USD traded at 0.8918, down 0.08%, while USD/JPY traded at 104.69 up 0.10% and NZD/USD was down 0.07% at 0.8278.
Elsewhere the greenback moved higher against most major currencies after data revealed the U.S. trade gap narrowed unexpectedly in November, sparking hopes the economy is improving and in less need of monetary support from the Federal Reserve.
EUR/USD was flat at 1.3615.
Demand for the greenback jumped after the Commerce Department said the U.S. trade deficit narrowed to USD34.25 billion in November from a revised deficit of USD39.33 billion in the previous month.
Economists were expecting the U.S. trade deficit to widen to USD40 billion.
U.S. exports rose 0.9% to a record high of USD194.9 billion, while imports fell 1.4% to USD229.1 billion.
Investors applauded the data but remained cautious ahead of the release of the Federal Reserve’s December meeting minutes on Wednesday as well as Friday’s U.S. December jobs report, with many eager to see fresh indications on the possible timing of further Fed stimulus tapering.
The Federal Reserve is currently buying USD75 billion in Treasury holdings and mortgage debt a month to spur recovery by suppressing long-term borrowing costs, which weakens the dollar as a side effect.
Monetary authorities have said they'll pay close attention to economic indicators when deciding the fate of stimulus measures.
Meanwhile in Europe, the yield on Irish 10-year government bond fell to its lowest level since 2009 following strong demand at auction, the country’s first offering since it exited its bailout last month.
Dampening spirits, however, was a report revealing that the annual rate of inflation in the euro zone slowed to 0.8% in December from 0.9% the previous month, which stoked deflationary concerns that softened demand for the single currency.
In Germany the data showed that the number of people out of work fell by 15,000 in December to 2.96 million, beating expectations for a decline of 1,000.
The country’s unemployment rate remained steady at 6.9%.
A separate report showed that German retail sales rose 1.5% in November, more than double expectations for an increase of 0.6%.
The greenback was down slightly against the pound, with GBP/USD up 0.02% at 1.6397.
The dollar was up against the Swiss franc, with USD/CHF up 0.01% at 0.9091 and was up against its cousins in Canada with USD/CAD up 0.04% at 1.0769.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 81.01.
On Wednesday, the U.S. is to release the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days.
Investors will also pay close attention to the Federal Reserve's minutes of its latest policy meeting.