Asian Session – Aussie extends losses after weak retail sales
July 3, 2013 6:24 am
Most currency pairs consolidated during a quiet Asian session. Markets are waiting for key risk events, mainly central bank policy meetings by the European Central Bank and the Bank of England tomorrow, as well as the closely watched U.S. nonfarm payrolls data.
The biggest mover though was the Australian dollar which continues to be hammered, seeing no relief after yesterday’s Reserve Bank of Australia policy statement. Today, disappointing Australian retail sales numbers place the Aussie under renewed pressure.
AUDUSD slipped to a new three-year low of $0.9073 following the data and the pair was pushed lower by comments from RBA Governor Glenn Stevens.
Speaking just a day after the Reserve Bank of Australia left its cash rate unchanged at a record low 2.75 percent, the RBA chief remarked at how surprised he was by the resilience of the Australian dollar, but noted that free-floating exchange rates “do eventually adjust.” This signalled that he expected the AUD to weaken.
Stevens added that the RBA stands ready to support an economy shifting to a new source of growth as its long-run mining investment boom cools.
In other currencies, the dollar consolidated gains versus the yen after a strong rally yesterday propelled the pair to a fresh four-week high of 100.84 yen.
Direction for the dollar will likely now be driven by the U.S. jobs data on Friday, and in the meantime investors will be adjusting their positions ahead of this key risk event. Meanwhile tomorrow is a holiday in the U.S., so markets will be closed for the Independence Day holiday.
Depending on the outcome of the nonfarm payrolls numbers, the Federal Reserve will determine when it will begin tapering stimulus. A better-than-expected figure would likely lift the dollar.
The euro was mostly in a range, though edged down slightly to $1.2961, to its lowest since June 3. Focus will be on tomorrow’s ECB meeting. Expectations are that the central bank will reiterate that the euro zone economy still needs stimulus.
Most currency pairs consolidated during a quiet Asian session. Markets are waiting for key risk events, mainly central bank policy meetings by the European Central Bank and the Bank of England tomorrow, as well as the closely watched U.S. nonfarm payrolls data.
The biggest mover though was the Australian dollar which continues to be hammered, seeing no relief after yesterday’s Reserve Bank of Australia policy statement. Today, disappointing Australian retail sales numbers place the Aussie under renewed pressure.
AUDUSD slipped to a new three-year low of $0.9073 following the data and the pair was pushed lower by comments from RBA Governor Glenn Stevens.
Speaking just a day after the Reserve Bank of Australia left its cash rate unchanged at a record low 2.75 percent, the RBA chief remarked at how surprised he was by the resilience of the Australian dollar, but noted that free-floating exchange rates “do eventually adjust.” This signalled that he expected the AUD to weaken.
Stevens added that the RBA stands ready to support an economy shifting to a new source of growth as its long-run mining investment boom cools.
In other currencies, the dollar consolidated gains versus the yen after a strong rally yesterday propelled the pair to a fresh four-week high of 100.84 yen.
Direction for the dollar will likely now be driven by the U.S. jobs data on Friday, and in the meantime investors will be adjusting their positions ahead of this key risk event. Meanwhile tomorrow is a holiday in the U.S., so markets will be closed for the Independence Day holiday.
Depending on the outcome of the nonfarm payrolls numbers, the Federal Reserve will determine when it will begin tapering stimulus. A better-than-expected figure would likely lift the dollar.
The euro was mostly in a range, though edged down slightly to $1.2961, to its lowest since June 3. Focus will be on tomorrow’s ECB meeting. Expectations are that the central bank will reiterate that the euro zone economy still needs stimulus.
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