audusd hits new six year low below 0 7000 target 1186542015
<p>AUD/USD hit a fresh six-year low below its 0.7000 downside target overnight after Australian Gross Domestic Product (GDP) data for the second quarter showed that […]</p>
Share this:
AUD/USD hit a fresh six-year low below its 0.7000 downside target overnight after Australian Gross Domestic Product (GDP) data for the second quarter showed that the country experienced its slowest economic growth in over two years. GDP expanded at a rate of only 0.2%, significantly off economists’ consensus forecast of 0.4% and down much further than the previous quarter’s 0.9%. This 0.2% figure for the second quarter represented the lowest growth rate since early 2013.
Coupled with increasing fears over a troubled China economy, this disappointing economic data from Australia helped to spur a plunge for the Australian dollar that has further extended the sharp downtrend that has been in place for more than a year, since the 0.9500-area high in mid-2014.
After hitting a low at 0.6981 during the Asian session on Wednesday, AUD/USD subsequently bounced and pared some of its losses, but was still weighed down by a relatively strong US dollar.
With major data from Australia now having been digested by the currency pair, all attention is now on the US dollar side of the equation and the ever-shifting speculation over the timing of a Fed rate hike. Employment data is a primary variable driving the Fed’s decision.
Data from ADP on Wednesday showed that US job growth in the private sector last month rose above the previous month but was significantly below expectations. Companies added 190,000 jobs in August, falling well under prior expectations of 201,000 jobs. Additionally, July’s numbers were revised down from 185,000 to 177,000. Despite these disappointing numbers, however, job growth was shown to have remained relatively solid, and the US dollar was not appreciably affected to the downside as a result.
The major data release for the US dollar this week is, of course, Friday’s Non-Farm Payrolls and Unemployment Rate reports. These numbers could substantially affect the course of the US dollar and the AUD/USD currency pair.
Better-than-expected data, which could point to an earlier Fed rate hike, should prompt even further losses for AUD/USD below 0.7000, with the next major downside target at the 0.6800 level. Any significantly disappointing data, which could result in a later rate hike, may prompt an AUD/USD bounce from its lows, with key upside resistance around the 0.7200 level.
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.