The Australian Dollar exchange rate declined against the Pound (AUD/GBP) and US Dollar (AUD/USD) on Wednesday after Chinese data weighed upon the Trans Tasman currency.
On Tuesday the ‘Aussie’ had been supported by data released by the Australian Bureau of Statistics (ABS) was mostly positive save for a report, which showed that Australia’s trade deficit widened more than forecast in September. The deficit widened to a reading of A$2.26 billion from the preceding months figure of A$1.01 billion. Economists had been expecting the deficit to widen to A$1.95 billion.
Overnight the ‘Aussie’ touched a low of 86 cents against the US Dollar but as the morning progressed it then rallied back up to trade in the region of 87 cents. The rally was spurred on by a separate report, which showed that retail sales increased strongly in September.
The data showed that seasonally adjusted retail sales rose by 1.2%, smashing economist forecasts for a rise of just 0.4%. The strong surge was said to be because of the release of the new iPhone 6. In a rare event, the Bureau of Statistics said what product was most responsible for the surge.
‘In seasonally adjusted terms the largest contributor to the rise was household goods retailing 4.1% where electrical and electronic goods retailing recorded growth of 9.2%. The figure was largely influenced by the release of the iPhone 6 during the month,’ said a statement released by the ABS.
Also supporting the Australian Dollar was the Reserve Bank of Australia’s (RBA) decision to leave interest rates unchanged at 2.5%. The move was seen as a positive as it supports the bank’s policy of stability in its rate decisions.
The Australian Dollar will likely experience volatility later in the session due to the publication of economic data out of the USA.
Australian Dollar Remains Higher on UK PMI Data
The ‘Aussie’ continued to push higher against the Pound after the latest UK Construction Purchasing Manager Index (PMI) data showed that the sector expanded at its slowest pace in five months.
The Markit compiled PMI fell to 61.4 in October, missing forecasts for a figure of 63.0. Despite the softer figure activity in the sector remains well above the 50 mark, that divides expansion from contraction.
The slowdown was likely a result of a cooling housing market. Mortgage approvals fell sharply last month as the Bank of England’s tougher lending measures begin to take effect.
AUD/USD Exchange Rate Continues to Rise on US Trade Data
The Australian Dollar continued its upward momentum against the US Dollar on Tuesday afternoon after the latest Trade Balance data out of the worlds largest economy came in below market forecasts.
According to the Washington based Commerce Department, the USA’s trade deficit widened in September and exports declined to the lowest level in five months, heightening concerns that a slowing global economy could negatively impact on the USA’s fourth quarter GDP figures.
The Commerce Department report showed that the nations’s trade gap increased 7.6 per cent to $43.03-billion. August’s trade deficit was revised to $39.99-billion from a previously reported $40.11-billion shortfall.
Chinese Data Weakens ‘Aussie’ on Wednesday
The Australian Dollar fell against the US Dollar and Pound Sterling on Wednesday after data out of China disappointed economists and raised concerns over the health of the world’s second largest economy and Australia’s largest trading partner.
Sentiment towards the ‘Aussie’ was hit after data released on Wednesday showed that activity in China’s service sector slowed to its lowest in three months in October, adding to signs of a slowdown. China’s HSBC services index came in at 52.9, down from 53.5 in September and below forecasts of 53.9.
Also weighing upon the Australian Dollar was the surging strength of the US Dollar which found support from the Republican victory in the US Mid term elections. The victory now means that the Republican party now controls both the House of Representative and the Senate, effectively ending the political deadlock that has negatively impacted the US economy over the past few years.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8674,
Australian Dollar,,Pound Sterling,0.5439 ,
Australian Dollar,,Euro,0.6936 ,
Australian Dollar,,New Zealand Dollar,1.1171 ,
US Dollar,, Australian Dollar ,1.1527 ,
Pound Sterling,, Australian Dollar ,1.8388 ,
Euro,, Australian Dollar ,1.4412 ,
New Zealand Dollar,, Australian Dollar ,0.8951 ,
[/table]
