When the markets are devoid of any economic drivers or news releases as we had last night you don’t have to look too far to find a reason for the Aussie dollar sell off , which to be fair was not that much of a selloff, between 0.2-0.75% against most of its trading partners.
The backlash from last week’s Federal Budget is now in full swing and some pundits are blaming last night’s selloff of the Aussie Dollar on the Budget. Voter support for the coalition has taken a dive for the worse since Treasurer Joe Hockey released his unpopular Budget, as it looks to hike taxes which are always unpopular, and initiate billions in cuts to federal spending.
A Nielsen poll has the Coalition down four points and Labour up four points and the Coalition’s primary vote down from 40% in April to 35% which since the September election is 11points lower.
As preferred Prime minister only 34% approve of Tony Abbot’s leadership skills while his opposition Bill Shorten’s numbers have improved to 47%.
We have some real meaty economic releases in the next 24 hours, both today on the domestic front as well as a flurry of economic data out from the UK tonight. Today’s important local release is the minutes of the RBA’s May meeting, which should cause a reaction from the AUD.
From the UK, we have Consumer Price Index which tracks inflation, Producer Price Index (which tells us the change in prices received for goods and services over time from the seller’s perspective) and Retail Sales which will tell us if the consumer is still spending in the U.K.
There is plenty there to offer short term direction for the Pound and the Australian dollar in particular.