Australian one dollar coins
A handful of Australian one dollar coins is shown in Sydney, February 18, 2004. Reuters/Tim Wimborne

Bell FX Currency Outlook: The Australian Dollar has fallenthrough USD0.7100 overnight as poor Chinese data rocks the markets once again.

Australia: In Australia yesterday, the RBA kept interest rates unchangedat 2.00% as widely expected by the market. While there were some changes to the statement, the market was very much left with the impression that the central bank were in no hurry to cut interest rates. This left the AUD to pretty much drift just above the USD0.7100 mark where we had been sitting when we came in yesterday morning. Overnight economic data out of China and the US disappointed markets which pushed the AUD down through the USD0.7100 level, overnight low was USD0.7007 with testing of 0.7000 highly likely. Soft Manufacturing data out of China and the US saw the market trade back into safe haven currencies which included the EUR surprisingly. Today we have Q2 GDP being released. The market is looking for 0.4%qoq result.

Majors: The USD tumbled against the JPY and the EUR Tuesday night asnew signs of an economic slowdown in China gripped markets. Softer manufacturing data in the world’s second largest economy spooked global markets which saw equities down across the board and haltered the rally in oil prices. The data also sparked concerns that the slow down in China could also slow the US economy and delay the Federal Reserve from raising interest rates in September. Investors fled into safe haven assets which saw Gold advance as well as Treasury’s. The USD fell 0.7% agains tthe EUR, while it fell 1.2% versus the JPY. The Dow was down 469.68 points or 2.8%, the German DAX fell around 2.5%, while the FTSE 100 was down 3%. There is no major data being released offshore tonight; however in the US they do have Factory Orders, ADP Employment and the Fed releases it’s Beige Book.

Economic Calendar 02 SEPT

  • AU GDP Q2
  • AU NAB Online Retail Sales Index
  • US federal Reserve Releases Beige Book
  • EC PPI Jul

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