Hit by the triple whammy of renewed US dollar strength, plunging commodity prices and weakness in global stocks, the Australian dollar fell heavily overnight.
As at 8.30am AEDT, the AUD/USD currently buys .7261, more than 1% below Monday’s opening level of .7334.
According to David de Garis, senior economist at the NAB, carnage in crude markets, along with another sizable fall in the spot price for iron ore, saw the Aussie decline in the face of “unrelenting commodity headwinds.”
“Commodities were front and centre of market attention overnight, with oil prices taking another sizeable hit. Both WTI and Brent crude were down between 5-6% in the wake of OPEC officially abandoning its 30mb target late last week,” wrote de Garis in his morning note.
“The price of oil has made new lows for the year, and is at the lowest level since early 2009. Elsewhere in the commodity space, base metals also declined, as did gold, while the price of iron ore is down another $0.97, or 2.42% to $US39.06 a tonne.
Looking ahead Tuesday’s Asian trading session, de Garis believes market attention will be on two key events: the release of the NAB business confidence survey for November at 11.30am AEST along with Chinese trade data at around 1pm AEDT.
Markets will “be focussed on the November NAB Business Survey, followed by the November Chinese trade numbers, the latter setting growth sentiment ahead of Saturday’s trio of Chinese economic activity reports for November,” de Garis wrote.
For the trade numbers, markets are looking for exports to decline 5% from a year earlier, an improvement on the 6.9% contraction registered in October, while imports are tipped to slide by 12.6%, again smaller than the 18.8% drop seen previously. As a result, the trade surplus is tipped to surge to $63.3 billion, the highest level on record.
Aside from the NAB business confidence report and Chinese trade figures, markets will also have to digest the latest ANZ-Roy Morgan consumer confidence report from Australia at 9.30am AEDT along with revised Q3 GDP data from Japan. Despite the significance of the latter, neither are likely to be market moving.
Here’s the current Australian dollar scoreboard.
- AUD/USD 0.7261 , -0.0078 , -1.06%
- AUD/JPY 89.55 , -0.79 , -0.87%
- AUD/CNY 4.6529 , -0.0427 , -0.91%
- AUD/EUR 0.6703 , -0.0033 , -0.49%
- AUD/GBP 0.4827 , -0.0026 , -0.54%
- AUD/NZD 1.0927 , 0.0062 , 0.57%