U.S and European equities fell overnight along with the Aussie dollar which resumed 6 days of losses that have seen AUD/USD fall by just over 300 points or in percentage terms around 4%. The falls coincide with renewed risk aversion across global markets stemming from concerns that the U.S Federal Reserve may start to tighten monetary policy again by raising the official U.S benchmark rate to 0.75% from 0.5%. Obviously an increase in U.S interest rates means worries for U.S equities (which in turn hurts global equities) and more demand for U.S Dollars thanks to an increase in the yield of the currency.
On a brighter note, Chinese data released yesterday showed their economy is stabilising across a number of areas with industrial production and retail sales appearing to trend or remain steady over the past year or so instead of declining. Ahead this evening is U.K employment numbers at 6.30pm.
DATA RELEASES TODAY:
GBP – Average Earnings & Employment Data at 6.30pm
AUD EXCHANGE RATES:
AUD/USD – 0.7462
AUD/GBP – 0.5657
AUD/EUR – 0.6652
AUD/NZD – 1.0299
AUD/JPY – 76.518
***Above rates are indicative wholesale rates and intended as a guide only***
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Patrick Downes
Senior Corporate FX Dealer
Compass Markets
Phone Patrick – +61 03 9099 8459
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