Aussie dollar holding above .74 cents as markets eye GDP numbers​


The Australian dollar is trading at .7461 this morning as the markets eye today’s Q3 GDP numbers.

“Many economists are expecting the GDP numbers to come out flat or negative,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

“Given this, the fact that the Aussie dollar is holding around the .74 cent region, while the US dollar strengthened against the major forex pairs overnight must be noted,” he added.

According to McKenna, one of the remarkable things about Australia’s GDP releases is that even when you think you have a handle on where it will print, when you’ve seen all the partials which feed into GDP, and when all the economists have made their calls, “there is always a chance of a surprise number.”

In other markets, oil prices dropped overnight while US stocks and the US dollar enjoyed a good run.

“We saw oil hitting some technical levels, plus record production and the news of a Saudi price reduction for Asian clients all weighed down on oil,” McKenna said

But stocks in the US have managed to keep in the black while their European counterparts celebrated solid data and the fact that the Italian referendum didn’t cause Eurogeddon, McKenna noted.

In fact, European stocks had a cracker shaking off any thoughts the Italian referendum loss was a clear and present danger. Milanese stocks rallied more than 4% as the banks index surged.

Meanwhile, the US dollar is back even though trade data which pre-dates Trump shows just how complicating a stronger dollar will be for the US economy.

READ  Aussie dollar back above 76 cents as markets await RBA decision

“The US dollar has its mojo back this morning. It’s up around 0.5% in the dollar index terms with a similar move in the Euro which has dipped back to 1.0705 as traders wonder about what the European Central Bank (ECB) will do at this week’s meeting,”

“It’s pretty clear they aren’t about to bring QE to a screaming halt. It’s equally clear they don’t want an open-ended commitment to stimulus,” McKenna said.

US factory orders were up 2.7% in October although we now know there is a chance that durable goods orders collapse in December.

“I say that because Donald Trump slammed the cost of a new Airforce One and cancelled the order,”

As a window into the kind of president he is going to be – we might actually see a swing back toward labour as a share of total income. Trump said words to the effect that ‘we want Boeing to make money but just not that much money.’

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