Australian Dollar Slides Amid Risk Aversion
January 16 2024 - 8:14PM
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The Australian dollar weakened against other major currencies in
the Asian session on Wednesday amid risk aversion, as weak crude
oil and bullion prices triggered some heavy selling at several
counters in energy and materials sectors.
Hopes also dwindled on an interest rate cut in the near future
following some hawkish comments from central bank officials. U.S.
Fed Governor Christopher Waller said interest rate cuts are likely
this year but added that the central bank can take its time
relaxing monetary policy. He said the process should be "carefully
calibrated and not rushed."
Crude oil prices fell, as a stronger dollar and forecasts that
weather in the U.S. will be warmer than normal weighed on oil
prices. West Texas Intermediate Crude oil futures ended down $0.28
at $72.40 a barrel.
In economic news, data from the National Bureau of Statistics
showed that the China's gross domestic product expanded 5.2 percent
on year in the fourth quarter of 2023, shy of expectations for 5.3
percent but up from 4.9 percent in the third quarter. On a
seasonally adjusted quarterly basis, GDP rose 1.0 percent, in line
with expectations and slowing from 1.3 percent in the three months
prior.
Also, the NBS said that the jobless rate in China was 5.1
percent in December versus forecasts for a steady reading of 5.0
percent.
The Australian dollar traded lower against its major rivals on
Tuesday.
In the Asian trading today, the Australian dollar fell to more
than a 1-1/2-month low of 1.6559 against the euro, from yesterday's
closing value of 1.6511. On th downside, 1.68 is seen as the next
support level for the aussie.
Against the U.S. and the Canadian dollars, the aussie dropped to
a 5-week low of 0.6561 and a 2-month low of 0.8861 from yesterday's
closing quotes of 0.6583 and 0.8882, respectively. If the aussie
extends its downtrend, it is likely to find support around 0.63
against the greenback and 0.86 against the loonie.
The aussie slipped to 96.74 against the yen, from a recent high
of 97.14. The next possible downside target for the aussie is seen
around the 94.00 region.
Against the NZ dollar, the aussie slipped to a 2-day low of
1.0706 from Tuesday's closing value of 1.0721. The aussie may test
support near the 1.06 region.
Looking ahead, U.K. consumer and producer prices for December
are due to be released in the pre-European session at 2:00 am
ET.
In the European session, Eurozone final consumer prices for
December is slated for release at 5:00 am ET.
In the New York session, U.S. MBA mortgage approvals data,
Canada PPI and raw material prices, both for December, U.S. retail
sales data, U.S. export and import prices, and industrial
production, all for December, U.S. business inventories for
November, U.S. NAHB housing market index for January and U.S. Fed
Redbook report are set to be published.
At 9:00 am ET, Federal Reserve Vice Chair for Supervision
Michael Barr will speak on "Cyber Risk" before the 2nd Annual
Massachusetts Institute of Technology/Federal Reserve System
Conference on Measuring Cyber Risk in the Financial Services
Sector, in Cambridge, Massachusetts, U.S.
At the same time, Federal Reserve Board Governor Michelle Bowman
will participate in discussion, "The Path Forward for Bank Capital
Reform," before the U.S. Chamber of Commerce Protect Main Street
Lending Event, in Washington D.C, U.S.
At 10:15 am ET, ECB President Christine Lagarde speak at 'How to
Trust Economics' event at the World Economic Forum held in Davos,
Switzerland.
At 3:00 pm ET, Federal Reserve Bank of New York President John
Williams will give opening remarks before hybrid event, "An Economy
that Works for All: Measurement Matters," at the Federal Reserve
Bank of New York.
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