Published: 24 Feb at 4 PM Tags: Euro, Dollar, America, Eurozone, Australian Dollar, Australia, USA, China,
US Dollar to Australian Dollar (USD/AUD) Conversion Rate Predicted to Tick Higher on Safe-Haven Demand
The US Dollar to Australian Dollar (USD/AUD) exchange rate strengthened by around 0.3% on Wednesday afternoon.
Despite the fact that US economic data produced disappointing results today, the US Dollar edged higher versus many of its major peers. The appreciation can be linked to safe-haven demand as falling oil prices and global equity market volatility dampens trader risk-appetite. One of the more disappointing data results today, and one that could potentially cause a delayed depreciation, was US services output. The US Services PMI was predicted to tick higher from 53.2 to 53.5, but the actual result dropped to 49.8; falling below the 50 mark that separates growth from contraction.
Commenting on the Services PMI data, Chris Williamson, chief economist at Markit said; â€˜The PMI survey data show a significant risk of the US economy falling into contraction in the first quarter. The flash PMI for February shows business activity stagnating as growth slowed for a third successive month. Slumping business confidence and an increased downturn in order book backlogs suggest thereâ€™s worse to come. With the exception of the government shutdown of October 2013, February has been the worst month for business since the recession. Business activity in services fell for the first time since the shutdown, accompanying a marked slowdown to near stagnation in manufacturing.â€™
The US Dollar to Australian Dollar (USD/AUD) exchange rate is currently trending in the region of 1.3932.
Australian Dollar to US Dollar (AUD/USD) Conversion Rate Predicted to Hold Losses after Wage Cost Index Missed Estimates
With safe-haven demand causing risk-correlated assets to decline, the Australian Dollar softened versus most of its currency rivals. Aiding the depreciation was data out of China
which showed Februaryâ€™s Consumer Sentiment dropped from 114.9 to 111.3. Also weighing heavily on demand for the â€˜Aussieâ€™ (AUD) was disappointing domestic data. Fourth-quarter Wage Cost Index came in at 2.2% growth on the year, missing the median market forecast 2.3% growth.
The shadow treasurer, Chris Bowen, calculated living standards had fallen by 3.5% since the Coalition came to power in September 2013. â€˜Instead of delivering a long-term economic plan that will increase living standards, the Coalition has preferred to increase the cost of living through its attack on penalty rates and slashing family tax benefits for low-income households,â€™ he said.
The US Dollar to Australian Dollar (USD/AUD) exchange rate dropped to a low of 1.3863 during Wednesdayâ€™s European session.
USD/AUD Conversion Rate Forecast: US Durable Goods Orders in Focus
Given that market sentiment is showing little sign of improvement, there is a high chance that the US Dollar to Australian Dollar (USD/AUD) exchange rate will hold gains throughout the Australasian session. With that said, Australia
â€™s Private Capital Expenditure data may provoke changes.
As Thursdayâ€™s session progresses the USD/AUD conversion rate will likely see changes in response to US Durable Goods Orders.
The US Dollar to Australian Dollar (USD/AUD) exchange rate reached a high of 1.3991 during Wednesdayâ€™s European session.
As of Wednesday, 24th February 2016, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.2647, GBP USD exchange rate was 1.3929, GBP AUD exchange rate was 1.9368, and GBP CNY exchange rate was 9.0978.