Aussie Holds Weaker In Asia, After Trade Data Shows Narrower Deficit

On Thursday, the Aussie held weaker in Asia after a slighter than anticipated trade deficit with the yen was generally flat as investors readied for a U.S. jobs report at the end of the week seen as crucial for measuring rate hike probabilities in December.

AUD/USD traded at 0.7610, down 0.14%, while USD/JPY changed hands at 103.50, down, 0.01%. GBP/USD traded at 1.2750, up 0.05%, while EUR/USD  was quoted down 0.01% to 1.1204.

Australia reported a trade balance for August with a deficit of A$2.01 billion, slimmer than the A$2.3 billion met.

On Tuesday, the Reserve Bank of Australia left its benchmark interest rate unmoved at 1.50% at its first policy meeting chaired by new governor Philip Lowe.

Earlier in the day, the Australian Bureau of Statistics stated that building approvals dropped by 1.8% in August, in comparison to expectations for a 7.0% decline. Building approvals increased 12.0% in July, whose figure was reviewed from a prior estimated 11.3% increased.

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, increased 0.03% to 96.16. Investors also took note of statements from Fed Vice Chairman Stanley Fischer on the influence of neutral rates on economic development.

Suddenly, the greenback came off highs on Wednesday after Fed member Charles Evans stated earlier on Wednesday he was “fine” with a December hike if data permit it. Markets are currently pricing at approximately a 14.5%  probability of a rate hike in November, according to the reports. For December’s meeting, odds were at approximately 59.3%.

The ADP nonfarm employment presented an increase of 154,000 jobs, less than the 166,000 seen, planning the focus on official nonfarm payrolls from the U.S. Department of Labor on Friday.

The Institute of Supply Management stated its non-manufacturing purchasing manager’s index increase to 57.1 the previous month from 51.4 in August. Analysts had expected the index to surge to 53.0.

Additionally, the cost of new factory orders increased an unexpected 0.2% in August, compared to a dropped forecasted as nondurables orders increased 0.2% and durable goods orders were revised up to a 0.1% surge, the U.S. Commerce Department stated.

Sterling recovered $1.27 mark after hitting 30-year low at $1.26 on Brexit concerns. The euro firmed after a report the European Central Bank (ECB) may wind down its bond buying program.

On Wednesday, dollar off highs in advance of U.S data,  sterling off 30-year lows.
The  dollar index was down 0.11% at 95.99 at 05:00 ET after peak of 96.09.
Fed Reserve member Charles Evans stated  earlier on Wednesday he was “fine” with December hike if data warrant it.

U.S. ADP nonfarm payroll, Purchasing Managers’ Index (PMI) data scheduled out later Wednesday.

Somewhere else, USD/CAD increased 0.41% to trade at 1.3172, the highest since September 30.

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