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 is trading slightly higher this morning after a bounce in US equity markets overnight.

Australia: After a relatively quiet session yesterday, the AUD lost ground in the afternoon as the Australian share market fell to its lowest level in 2 years. The ASX 500 fell below the all-important psychological level of 5000, after a big-sell off of resource stocks, in particular, global miner BHP Billiton. The AUD fell as low as USD0.6937, looking vulnerable as we headed into the offshore session. However risk sentiment eased in theEurope and the US sessions and the AUD slowly regained some ground. Currently this morning we are trading around USD 0.7000. On the day we have private sector credit and building approvals being released. Private sector credit is expected to print on the positive side, while a drop inbuilding approvals in expected. Looking ahead, Federal Reserve chairman Yellen is speaking (5:00am AEST) ahead of Friday’s US payrolls report.

Majors: The USD had a mixed session overnight, falling broadly against some of the majors as investors still sought further clarification on the health of the US economy. US equities edged higher, recovering from previous night’s losses. The Dow rose 47.24 or 0.3%, it had initially bounced 117 points on the opening bell but that was reversed over the course of the day. Many in the market remain worried about global growth and have doubts about the Federal Reserve increasing interest rates for the first time since 2006. The market is now looking forward to Friday when the US non-farm payrolls are released for the month of September. Economists predict the report will show the US economy created 200,000 new jobs this month, compared with 173k in August. If we see 200k the market will look at the December meeting for a Fed rate hike.

Economic Calendar 30 SEPT

  • AU Private Sector Credit MoM/YoY
  • AU Building Approvals MoM/YoY
  • UK GDP QoQ/YoY
  • EC Unemployment Rate / CPI Core YoY

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