The dollar is just about regaining the upper hand and certainly in the case of the Aussie, AUDUSD has retraced all the way back from above 0.7900 just a week ago to 0.7630 at the time of writing, not all that far off testing a near six year low. Downward pressure on the Aussie is coming from growing concerns about China and commodity prices that remain depressed. This hasn’t put off risk appetite in many Asian equities which continue to test and push to new seven year highs, but iron ore and crude are languishing indicating that investors see a tough run for China over the longer term, whereas short term stimulus measures could keep indices supported.
The dollar recovery has not played out so much against the euro with EURUSD at 1.0780, still some way off its lows, as recent data continues to surprise with yesterday showing decent German inflation figures and some surprisingly strong Italian confidence numbers all allowing the single currency to hold its ground. Already this morning German retail sales have come in slightly better than expected month-on-month and even French consumer spending has managed a 0.1% rise as opposed to the expected 0.0%. Eurozone inflation data this morning will be closely watched and then later in the day we see US consumer confidence expected to post a figure of 96.0, just slightly down on the previous month’s number of 96.4. Overnight keep an eye out for the Japanese Tankan data and Chinese non-manufacturing PMI as we commence the new month and quarter.
Further reading:
FXStreet and FxPro kick off a new advertisement model
Euro-zone remains in deflation – EUR/USD pressured
Share
