Australian Dollar Outlook - 03/30/2012
Bell FX Currency Outlook: The Australian Dollar continues to be pressured this morning and is trading at
new session lows against the US Dollar and major currencies.
Australia: The Aussie traded to a low of 1.0305 overnight to open at 1.0380 this morning. Concerns over the slowing pace of growth in China, Australia's largest trading partner, have weighed on the local unit, with developments out of China driving markets for the past few weeks.
The risk off theme is likely to continue into next week, adding to downside risk for the currency, as prospects of a rate cut start to resurface, although that said, who honestly knows what the RBA will do.
We see a generally quiet day with local data for Private Sector Credit and New Homes Sales data due. With global financial market uncertainty continuing, credit growth is expected to show a modest gain of 0.3%.
New Home Sales plunged by 7.2% in February posting its worst reading in four years. If this figure remains below zero for the March read, this could put further pressure on the currency. We see a pretty strong base at 1.0300 for the moment.
Majors: Concerns over European debt resurfacing and disappointing jobs read out of the US, added to the generally negative tone and risk-off sentiment overnight.
US Jobless claims fell to 359k, slightly worse than the 351k expected. US equities trimmed losses in the final hours of trade, with the S&P 500 and Nasdaq closing marginally lower at 1403 and 3095, while the Dow jones closed up 0.1% at 13,146.
Comments from US Federal Reserve chairman Ben Bernanke who remains confident in the long-term growth prospects of the US economy did little to move markets.
Whilst he remains confident, he described the pace of the US economy as "extremely sluggish" and "still a long way from where we'd like to be". European equities fell as a further restructuring of Greek debt and concerns over Portugal resurfaced. The DAX fell 1.8% to 6875 with the FTSE 100 1.2% lower at 5742.
Oil prices also declined overnight with WTI futures falling 2.1% to USD 103.24 per barrel, and Brent futures closing 1.3% lower to USD 122.56. Discussions regarding the possible release of petroleum reserve between the US, France and the UK continue to weigh on prices.
Economic Calendar
30 MAR AU Private Sector Credit FEB
CH MNI March Business Condition Survey
GE Retail Sales FEB
US Personal Income / Spending FEB