Home Forex Exchange FOREX-Aussie whacked lower again on economy concerns – Kitco News

FOREX-Aussie whacked lower again on economy concerns – Kitco News

5 min read

* Aussie slips 0.5 pct after sentiment data

* Euro ticks higher on industrial output numbers

* Pound bounces ahead of next Brexit vote

* (Adds details, updates prices)

By Tommy Wilkes

LONDON, March 13 (Reuters) – The Australian dollar skidded
lower on Wednesday after a consumer confidence gauge triggered
fresh concerns about a slowing economy.

Sterling was the other big mover, adding more than half a
percent on hopes UK lawmakers will vote against a no-deal Brexit
later in the day. Foreign exchange markets elsewhere were mostly quiet, with
investors reluctant to take risks as the cautious mood in Asia
spread to Europe.

A measure of Australian consumer confidence slumped to its
lowest in over a year in March, adding to recent signs of
weakness in the economy. The Aussie has been sensitive to signs of a loss of
economic momentum, particularly after the Reserve Bank of
Australia’s upbeat outlook last week failed to dispel bets it
would have to lower rates eventually. The Aussie fell half a percent to as low as $0.70495,
although the currency was above two-month lows of $0.7003 hit
last week. It had recovered to $0.70635 by 1000 GMT.

"Yields have come off, stockmarkets are in the red and in FX
land, USD and JPY (Japanese yen) are outperforming at the
expense of AUD and NZD (New Zealand dollar), particularly after
softer domestic data," said Sue Trinh, an analyst at RBC Capital

Trinh said the weak March consumer confidence data in
Australia highlighted "continued weakness in consumer spending",
and especially a slowdown in the country’s property market.

The New Zealand dollar, which often tracks the Australian
currency because the two economies are closely linked, also
fell, by 0.3 percent to $0.6837.

The euro made a small move upwards after
better-than-expected euro zone industrial production numbers for
January. The single currency rose 0.1 percent to as high as
$1.13 . The U.S. dollar index was slightly lower, at 96.899 against rival currencies.

Tuesday’s softer-than-expected U.S. February inflation data
and falling U.S. government bond yields have dented dollar
demand, analysts said.

MUFG analysts noted that euro/dollar had "fully reversed
last week’s sell-off following the dovish ECB (European Central
Bank) meeting".

The Japanese yen held firm at 111.32 yen per dollar.

Sterling added 0.6 percent against the dollar and
the euro.

Prime Minister Theresa May lost a second attempt on Tuesday
to get her Brexit withdrawal agreement passed by parliament, but
the currency’s losses have been tempered because most investors
are confident Britain will avoid a disruptive Brexit and instead
seek to postpone a March 29 departure date from the European

The pound has had a rollercoaster ride this week, its range
varying 3-1/2 cents against the dollar.
(Editing by Mark Potter and Edmund Blair)

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