The Australian dollar continued to slide overnight, falling to a fresh four-week low of .7338.
A slew of strong US economic data releases, providing further confidence that the US Federal Reserve will continue to hike interest rates in 2017, saw US bond yields lift during the session, sending the US dollar index to the highest level seen in 14 years.
“US 10-year treasury yields initially extended yesterday’s post-FOMC rise by another 7bp to 2.64% — a two-year high — before steadying around 2.60%,” said Imre Speizer, senior market strategist at Westpac.
“Fed funds futures are now pricing a 100% chance of another hike by June.”
However, while the Aussie was in the wars against the US dollar, it actually rallied against the crosses, helped by a strong Australian jobs report for November released earlier in the session and a rebound in iron ore prices:
- AUD/USD 0.7356 , -0.0046 , -0.62%
- AUD/JPY 86.89 , 0.26 , 0.30%
- AUD/CNH 5.0986 , -0.0272 , -0.53%
- AUD/EUR 0.7063 , 0.0039 , 0.56%
- AUD/GBP 0.5922 , 0.0032 , 0.54%
- AUD/NZD 1.0455 , 0.0059 , 0.57%
Turning to Friday trade in Asia, there is nothing on the economic calendar that will be of interest to financial markets.
It’s eerily quiet.
That theme continues later in the session with only second-tier data released in both Europe and North America.
The dearth of economic data ensures that movements in US bond yields, Chinese commodity futures and the USD/CNY will likely dictate those in the Aussie today.