The Australian dollar weakened against the other major currencies in the Asian session on Thursday, following the release of disappointing trade data for October.
Data from the Australian Bureau of Statistics showed that the nation’s exports were down 3.0 percent on month in October to A$26.594 billion. While, the imports were roughly flat at A$29.900 billion.
Australia posted a merchandise trade deficit of A$3.305 billion in October, down 38 percent from the previous month. The headline figure was shy of expectations for a shortfall of A$2.60 billion and down from the A$2.403 billion deficit in September.
Meanwhile, the data fueled RBA rate cut bets in the upcoming policy meeting. In the recent monetary policy statement, the Reserve Bank of Australia said that the bank’s monetary policy outlook is data-dependent.
Data from Australian Industry Group showed that the service sector in Australia continued to contract in November, and at a faster pace with a PMI score of 48.2. That’s down from 48.9 in October.
In other economic news, data from Caixin showed that the services sector in China continued to expand in November, albeit at a slower rate, with a PMI score of 51.2. That’s down from 52.0 in October.
Meanwhile, the Asian stocks traded lower due to a steep fall in commodity prices and as comments from the U.S. Federal Reserve Chair Janet Yellen suggested that the central bank remains on track to raise interest rates later this month. Investors were also cautious after news of a mass shooting in California that left at least 14 people dead.
Crude oil prices fell below the $40 a barrel mark overnight.
Wednesday, the Australian dollar rose 0.08 percent against the U.S. dollar, 0.41 percent against the yen, 0.02 percent against the euro, 0.01 percent against the Canadian dollar and 0.36 percent against the NZ dollar.
In the Asian trading, the Australian dollar fell to 2-day lows of 1.4562 against the euro and 89.79 against the yen, from yesterday’s closing quotes of 1.4517 and 90.06, respectively. On the downside, 1.49 against the euro and 88.00 against the yen are seen as the next support levels for the aussie.
Against the U.S. and the Canadian dollars, the aussie dropped to 2-day lows of 0.7284 and 0.9723 from yesterday’s closing quotes of 0.7307 and 0.9749, respectively. If the aussie extends its downtrend, it is likely to find support around 0.71 against the greenback and 0.95 against the loonie.
The aussie edged down to 1.0972 against the NZ dollar, from yesterday’s closing value of 1.0996. The aussie may test support near the 1.07 region.
Meanwhile, the safe-haven yen rose against its major rivals amid risk aversion.
The Swiss franc rose to more than a 2-week high of 1.0800 against the euro, from an early low of 1.0816. The Swiss franc may test resistance near the 1.07 region.
Against the pound, the franc advanced to a 3-week high of 1.5208 from yesterday’s closing value of 1.5242. If the Swiss franc extends its uptrend, it is likely to find resistance around the 1.50 area.
The franc climbed to 1.0180 against the U.S. dollar, from an early low of 1.0197. The pound is likely to find resistance around the 1.00 area.
Against the yen, the franc edged up to 121.05 from yesterday’s closing value of 120.97. The next possible upside target level for the franc is seen at 123.00 area.
Looking ahead, at 1:00 am ET, European Central Bank executive board member Yves Mersch speaks in Frankfurt.
Half-an-hour later, Bank of Japan board member Takahide Kiuchi is expected to speak at a forum on capital markets in Tokyo.
Services and composite PMI reports from major European economies for November and Eurozone retail trade data for October are due later in the day.
The European Central bank will announce its interest rate decision at 7:45 am ET. Economists expect the bank to keep its interest rates unchanged at 0.05 percent.
Following the announcement, European Central Bank President Mario Draghi will hold the customary post-meeting press conference at 8:30 am ET.
In the New York session, U.S. weekly jobless claims for the week ended November 28, U.S. Markit’s services and composite PMI for November, U.S. factory orders and durable goods orders, both for October and U.S. ISM non-manufacturing composite PMI for November are slated for release.
At 8:40 am ET, Federal Reserve Bank of Cleveland President Loretta Mester gives welcome remarks before the “Financial Stability: Policy Analysis and Data Needs” conference sponsored by the Federal Reserve Bank of Cleveland and the Treasury Department Office of Financial Research, in Washington DC.
At 1:10 pm ET, Federal Reserve Governor Stanley Fischer is expected to speak about financial stability at the Federal Reserve Bank of Cleveland’s conference, in Washington DC.
The material has been provided by InstaForex Company – www.instaforex.com