It was a mixed result for the AUD overnight. The ‘Aussie’ made considerable gains against the USD and GBP of close to half a percent and moderate gains against the EUR and CAD of approximately a quarter a percent. It did however lose value against the NZD, falling by half a percent before correcting slightly to its current level of down by just over a quarter of one percent.
The Greenback lost value across the board last night due to a poor Gross Domestic Product figure being printed. Although the economy was expecting a reduction to this economic indicator, the actual result was much worse than anticipated. Economic forecasts suggested that GDP out of the US would reduce from -1.0% to -1.8%, however, what eventuated was a reduction of -2.9%. Further economic data out of the US last night also failed to provide support for the USD. Durable Goods Orders for May and the quarterly Personal Consumption figures also fell below expectations which added downward pressure to the Greenback.
There is further data out of the US to be released this evening. The data will provide an insight to Personal Income and Expenditure for the month of May in the US. Whilst expectations are that the figures will be similar to the previous months’, any deviation from the forecast will continue to add volatility to the AUD-USD currency pairing. Better than expected data may reverse the previous night’s loss of value of the USD, however it the figures fail to meet the targets for a second night in a row, we can expect to see the ‘Aussie’ rally against the Greenback.
Low-tier data relating to job vacancies for May will be released out of Australia today although the Chinese Industrial Profits data scheduled for release tomorrow is likely have more of an impact to the AUD. Manufacturing PMI out of China provided great support for the Australian Dollar earlier in the week and another positive result from the Chinese economy will ensure the ‘Aussie’ finishes the week strong.