Aussie drops to 45-day lows against US dollar
The Aussie dollar sank by 0.83% to US$0.7043 at around 8.00am GMT and had fallen to a low of US$0.7027 moments earlier, the lowest since March 11 this year.
The Australian dollar sank to 45-day lows against the greenback on Wednesday, in a response to the weaker-than-expected inflation numbers released today and a bullish rally for the United States (US) dollar on strong US earnings results and positive new home sales data.
The Aussie dollar slumped by 0.83% to US$0.7043 at around 8.00am GMT and had fallen to a low of US$0.7027 moments earlier, the lowest since March 11 this year, IG data showed. Trading view from IG’s client sentiment was bearish, with 28% of the clients shorting the currency, additional information from DailyFX revealed.
Australia’ consumer price index stalled to a 1.3% increase in the first quarter of this year, following the 1.8% gain in the previous quarter, the lowest reading since September quarter of 2016.
The soft outcome for the start of the year prompts the possibility of an interest rate cut this year. The last time inflation was lacklustre, the Reserve Bank of Australia had responded by two rate cuts in 2016 - one in May and the other in August.
Upbeat US earnings, new home sales
Meanwhile, Wall Street’s S&P 500 and Nasdaq ended Tuesday’s session at record highs after solid earnings. The Dow Jones Industrial Average also rose by 0.55% to 26,656.39 at the close.
Broad-based S&P 500 ended the day’s trading 0.88% higher at 2,933.68, three points above its previous record in September while tech-rich Nasdaq Composite Index climbed 1.32% higher to 8,120.82.
Upbeat earnings results for Tuesday included Coca Cola, which reported a revenue of US$8.02 billion for the first quarter, topping the US$7.88 billion expected. Earnings from continuing operations came in at 48 US cents per share, beating Wall Street’s estimates of 46 US cents per share.
Yesterday, economic data from the US showed sales of new US homes unexpectedly rising in March, ascending to a 16-month high and on a third-consecutive month of increase, supported by lower borrowing costs. Single-family home sales rose by 4.5%, topping estimates in a Bloomberg poll.
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