Uncut sheets of former U.S. President Abraham Lincoln on the five-dollar bill currency are seen at the Bureau of Engraving and Printing in Washington March 26, 2015.
IN PHOTO: Uncut sheets of former U.S. President Abraham Lincoln on the five-dollar bill currency are seen at the Bureau of Engraving and Printing in Washington March 26, 2015. The 150th anniversary of Lincoln's assassination at Ford's Theatre in Washington is April 15. REUTERS/Gary Cameron

Bell FX Currency Outlook: The Australian Dollar has openedthis morning below .7300 after the latest manufacturing PMIdata from China on Friday hit a 15 month low.

Australia: Although commodity markets continue to remain generallyweak the AUD was nudged lower early Friday afternoon after the releaseof July’s preliminary Caixin (previously HSBC) flash manufacturing PMIdata. The index fell to 48.2 which was a 15 month low. Although therecent weakness of the AUD has been attributed to the expectation thatinterest rates will rise sooner than later in the US, the effects of China’sslower growth rate on the AUD is still a major factor. The AUD traded toits lowest level since May, 2009 on the poorer result from Australia’slargest trading partner on Friday. This week is a very light week in termsof new data to be released. Later this morning we will see the latestindustrial profit figures from China.

Majors: On the US Federal Reserve’s website, staff projections on thefuture path of interest rates were inadvertently revealed. Q4 projectionsare for a rate of 0.35% versus the present 0.13%. Staff projections are fora rate of 1.26% by the end of 2016 and 2.10% by the end of 2017 which isa bit higher than previously thought. They expect inflation to be below 2%until late 2020 and in that year they see GDP growth at only 1.7%. OnFriday the latest new home sales figures for June in the US were weakerthan expected falling 6.2% although the general rising trend over the lastyear remains on track. The US Markit manufacturing PMI prelim numbersfor July came in at 53.8 which was slightly better than last month and whatwas expected. The Eurozone’s and Germany’s PMI data for July on apreliminary basis were slightly softer than expected. In the UK, Chief Economist Haldane at the Bank of England said their economy was “stillhealing” and that there was “unused capacity out there” implying that the Bof E will only raise interest rates gradually. Tonight we wil see the latestconfidence figures from Germany.

Economic Calendar

27 JUL

  • US Durable Goods Orders Jun
  • US Dallas Fed Manufacturing Activity

Jul28

  • JUL AU ANZ Roy Morgan Weekly Cons Confidence
  • US Consumer Confidence Index Jul

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