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 AUD is slightly lower this morning, drifting back down through USD0.7100 in what was arelatively quiet night.

Australia: Movements overnight were mostly driven by equity market falls in the US and Europe. A drop in commodities also weighed on the AUD. This morning the AUD was trading at USD0.7090, down from USD0.7150 late Tuesday. Investors and traders are waiting for some key manufacturing data to be released out of China today at around 11:45AEST. If the data is weak than this is likely to place further pressure onthe AUD as the market will continue its “risk-off” unwinding. However even if the data does come out better than expected, the AUD may still come under pressure as it will increase the likelihood of a US interest rate hikewhen the Federal Reserve next meets in October. There are no major data releases in Australia today.

Majors: Global stocks fell Tuesday as did commodity and oil prices. The JPY strengthened as investors headed into the perceived “safe-haven”currency. The JPY rose 0.4% against the USD and 0.9% against the EUR. It was a relatively quiet night with investors mainly jittery ahead of China’s Caixin flash manufacturing purchasing managers index, which many expect to show factory activity at contractionary levels. If we see a negative result this will again heightened concerns about an economic slowdown in China, the world’s largest consumer of raw materials. In Europe, the VW scandal saw auto stocks leading a decline in the DAX which closed down 3%, while in the UK the FTSE fell 2.8%. There is no major data being release offshore tonight in the US or Europe. Instead, as mentioned above, the market will very much be focused on today’sChinese data.

Economic Calendar 23 SEPT

  • CH Caixin China PMI Mfg
  • CA Retail Sales/Ex Autos MoM
  • US Fed’s Lockhart speaks on economy (V)
  • US Markit US Manufacturing PMI

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