The Australian Dollar has been trading at record lows against most of the majors. The Australian Dollar to UK Pound Sterling Exchange Rate (AUD/GBP) close to the lowest point seen since late 2009, Australian Dollar to US Dollar Exchange Rate (AUD/USD) at a 4.5 Year low and the Australian Dollar to New Zealand Dollar Exchange Rate also close to a record low that hasn’t been seen more than twice, most recently earlier this year then previous to that in 2008.
Yesterday provided a relatively stable day of trading with a lack of local and offshore data during both trading sessions. The Australian Dollar made some marginal upward movements however still showed substantial weakness with lows consistent against all currencies.
The Australian Dollar to US Dollar Exchange Rate Continues Downward.
The Offshore session provided the release of medium tiered data from the US in the form of Industrial Production which provides a value for the output produced by manufacturer’s mines and utilities. The Result was a positive improvement on the previous month at 1.3% increase.
The Australian Dollar to US Dollar Exchange Rate (AUD/USD) is currently trading at 82.10 US Cents at 8:30 AM AEST Today.
Focusing on the US, tonight will provide the release of Building Permits which is projected to come in with a slight reduction on the last months result from 1.08M to 1.06M. Whilst relatively significant, the high event risk day for the US will be Wednesday night with The Bureau of Labour Statistics releasing Consumer Price Index (CPI), the leading inflation indicator which is forecast to provide a result of 0.1%.
During the offshore session of Wednesday will also be the Federal Open Market Committee (FOMC) Press Conference where we will have the last Federal Fund Rate decision for the year and the accompanying FOMC statement. Investors will be waiting this looking for any possible Hawkish statements made by The Fed to indicate when we can anticipate future Interest Rate Changes for the coming New Year.
High Event Risk Day for the AUD/GBP Exchange Rate
Today provides a high event risk day for the Australian Dollar to UK Pound Sterling (AUD/GBP) with a number of significant releases from the central banks in both countries.
The Reserve Bank of Australia (RBA) will release their monthly Monetary Policy Meeting Minutes today for the December Interest Rate decision. Investors will look closely for any indication of the RBA’s stance on the recent discussions that the next Interest Rate change will be a cut.
The RBA will continue to be in focus today with Governor Guy Debelle speaking at the 27th Australasian Finance and Banking Conference in Sydney at 10:15 AM. Speeches by Governors of the RBA general cause a high level of volatility in the market as investors look for subtle clues on the stance of the RBA.
During the Offshore session tonight the Bank of England (BoE) will releasing their Financial Stability Report where Governor Mark Carney will speak in relation to this report.
The BoE will also release of the Bank Stress Tests which will provide information on the stability of the UK Banks and whether they have sufficient Capital reserve to cover during current and future economic condition changes.
The AUD/GBP Exchange Rate is currently trading at 0.5248 at 8:30 AM AEST Today.