AUD drops on capex data

While a more resilient greenback remains the key theme in the FX space, the AUD has managed to lose a figure in Asian trade with a disappointing private capital expenditure report driving the losses.

Source: Bloomberg

The headline Q1 private capex print was down 4.4% when the market was expecting a 2.3% fall. Even more concerning was the intended spending for 2015-2016 numbers as that came in at just $104 billion when the market was expecting around $115 billion. This was enough to spook any AUD bulls out there and AUD/USD swiftly dropped below the $0.7700 handle. AUD/USD traded to as low as $0.7670 and remains under a fair bit of pressure. April lows in the 0.7560 region are now in sight and traders will likely be targeting moves to those lows. Surprisingly though, this is all happening despite iron ore prices rising with traders focusing on short term yield spreads instead. I would prefer selling the pair on any rallies back above 0.7700. On the calendar today unemployment claims are the only noteworthy release that could affect the greenback.


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