Aussie dollar lower on poor data

The Australian dollar opened lower today after poor US and Italian economic data weakened investor sentiment for risk.

深圳桑拿网

At 0700 AEST on Monday, the Australian dollar was trading at $US0.8933/35, down from Friday’s close of $US0.9025/28.

Since 1700 AEST on Friday, the local currency traded between $US0.9034 and $US0.8922.

Bank of New Zealand currency strategist Mike Jones said the unit was dragged lower after equity markets reacted poorly to US retail trade data on Friday and a poor auction of Italian bonds.

“The Aussie dollar played hostage to equity markets on Friday and the weaker sentiment knocked it lower,” Mr Jones said.

During Friday’s offshore session, the US Commerce Department said retail sales rose 0.4 per cent in July after two months of decline, but the figure was slightly below the 0.5 per cent rise expected by most analysts.

The result dampened risk appetite on US equity markets, which closed lower.

The Dow Jones Industrial Average was down 0.16 per cent at 10,303.15 points, and the broader S&P 500 index fell 0.40 per cent to 1,079.25 points.

Also during the offshore session, Italy suffered a weaker than expected bond auction that also dampened the mood for risk.

The auction of 15-year government bonds garnered bids worth 1.27 times the amount on offer, down from a bid-to-cover ratio of 1.74 the last time that bond was on offer in May, it was reported.

“The Aussie traded lower with those trends,” Mr Jones said.

He expected the local dollar to trade between $US0.8900 and $US0.8980 on Monday (AEST), with no market moving domestic data due.

“Failing a wash out on Asian equities, it will trade in that range today,” Mr Jones said.

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