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Dollar’s tumble continues

Sep 22, 2014

The Australian dollar is at six month lows against the greenback and could potentially fall further if upcoming data shows strength in the US economy or weakness in China.

At midday (AEST) Monday, the local currency was trading at 89.27 US cents, down from 89.55 cents on Friday.

The US dollar strengthened against all G10 currencies on Friday night, sending the Australian dollar as low as 89.21 US cents, its lowest point since early March.

“The Australian dollar/US dollar remains vulnerable to further declines at the hands of continued broad-based US dollar strength over the coming week,” FXCM market analyst David de Ferranti said.

A busy week for US economic data could bolster expectations of interest rate rises by the US Federal Reserve, which could further strengthen the US dollar, he said.

Chinese manufacturing data to be released on Tuesday could also put further downward pressure on the Australian dollar if it disappoints market expectations, Mr de Ferranti said.

Meanwhile, Australian bond futures prices were higher.

The December 2014 10-year bond futures contract was trading at 96.310 (implying a yield of 3.690 per cent), up from 96.230 (3.770 per cent) on Friday.

The December 2014 three-year bond futures contract was at 97.100 (2.900 per cent), up from 97.040 (2.960 per cent).

 

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