Aussie Declines versus Greenback amid Lower GDP Growth - 4.12.2013
The Aussie got weaker in early Wednesday trading against the US dollar amid GDP data disappointed market participants. The 3rd quarter growth stood at 0.6%, lower than estimated at 0.7% as well as compared to previous quarter upward revised growth of 0.7%. Moreover, the latter triggered more speculation that RBA could become more accommodative adding pressure on the AUDUSD which declined by 1.18% from yesterday peak at 0.9140 to as low as 0.9032, breaching key support at 0.9058, thus increasing downside chances.
Elsewhere, US equities dipped as speculation is mounting for asset tapering due to recent improvement on PMI indicators. The Dow Jones fall below 16,000 mark to 15,914, diving by 0.59% last night. NIKKEI 225
followed losing by 2.17%, the USDJPY also dipped to support at 101.97 last night. Volatility with the forex pair was high after Australian GDP data but the currency pair managed to claw back almost half of previous loses, was lastly seen at 102.74.
USDJPY
In focus today will be the BOC rate statement, it is broadly anticipated that key rate will be maintained at 1.00%. However Canadian inflation declined below 1% to 0.65% which is likely to force BOC to become more dovish, that is reflected on USDCAD’s upside. In addition, declining oil prices have contributed to Canadian dollar weakness. The USDCAD breached cap at 1.0559 the previous week and jumped in latest trading to 1.0671, upside bias remain strong but daily technical indicators are becoming overbought.
Today’s trading day is busy in terms of news as traders attention zooms on Euro-zone GDP data, US ADP employment report an early indication of NFP report, BOC Rate Statement, Canadian Trade Balance and lastly on US ISM-Non Manufacturing PMI.