The Australian Dollar to US Dollar (AUD/USD) exchange rate fell by over 0.5% to trend within the region of a four-year low on Wednesday as a lacklustre growth report from Down-Under saw investors ditch the commodity-driven currency.
The news that the Australian economy expanded by just 0.3% in the three months through September, rather than the 0.7% expected, saw the Australian Dollar soften across the board overnight.
As well as falling to a low of 0.8384 against the US Dollar, the Australian Dollar posted notable declines against both the Euro (AUD/EUR) and Pound (AUD/GBP).
The movement saw industry expert Stephen Innes comment; ‘The next key level is down at 0.8315 US cents, which we have not seen since 2010 […] As they say in the markets, the trend is your friend… and I can’t see many willing to stand in front of this freight train.’ Innes said.
The Australian Dollar to US Dollar (AUD/USD) exchange rate consolidated declines during the North American session as the US published better-than-expected services data.
The ISM Non-Manufacturing gauge surprised investors by climbing from 57.1 in October to 59.3 in November. This beat forecasts for a reading of 57.5 and was the best result since 2005.
Before the report was published economist Stuart Hoffman noted; ‘The services economy is gearing up for the holiday-shopping season. Consumers are looking good, and the drop in gasoline is saving them millions and millions of Dollars, right at an important time.’
The strong services figure bolstered the US Dollar and counteracted the adverse impact of a below-forecast ADP Employment Change report.
During the local session, the Australian Dollar could recoup losses against the US Dollar if Australia’s retail sales and trade balance reports show improvement.
Conversely, disappointing figures could inspire further ‘Aussie’ declines.
US news to look out for on Thursday includes initial jobless and continuing claims figures. Speeches from two Federal Reserve officials could also impact trading.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trading in the region of 0.8422 before the close of Wednesday’s European session.
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