Australian dollar unchanged by CAPEX despite beating estimates

Australian dollar unchanged by CAPEX despite beating estimates

Australian dollar flat despite strong capex data
Source: Bloomberg

New figures released by The Australian Bureau of Statistics have barely moved the Australian dollar against the greenback, despite better than expected CAPEX data.

ABS figures show an uptick in September private capital expenditure(CAPEX) with the CAPEX slipping 0.5%.

In response to the results, the AUD/USD barley moved above 0.73, remaining relatively unchanged post-CAPEX release.

The Capex was better than estimated, with analysts expecting the Q3 CAPEX to rise 1 %, following a revised -0.9 % reading.

Suprising analysts, the Q4 estimated CAPEX in the 2018/19 financial year came in at AUD $114.1 billion, beating the estimated $108.5 billion.

Private New Capital Expenditure figures

  • According to the ABS, the trend volume estimate for total new capital expenditure fell by 0.4% in the September quarter 2018 while the seasonally adjusted estimate fell by 0.5%.
  • ABS figures show the trend volume estimate for buildings and structures fell by 1.6% in the September quarter 2018 while the seasonally adjusted estimate fell by 2.8%.
  • ABS figures show the trend volume estimate for equipment, plant and machinery rose by 1.3% in the September quarter 2018 while the seasonally adjusted estimate rose by 2.2%.

Forex traders await Fed meeting results

Analysts say the AUD/USD was more likely to change after yesterday's rally, reacting to Fed chairman Powell's speech, which had many investors betting the Fed’s would pause the next rate hike.

Yesterday’s comments by Powell moved the AUD/USD to top range, with analysts predicting a clean break higher post weekend meeting between President Trump and Xi.

While other factors come into play, Powell’s speech saw a move in many foreign currencies, including the Australian dollar.

Analysts say the AUD/USD was among the best preforming pair in response to Powell’s speech.

Post-speech, some of the most significant movers were:

The EUR/JPY, rallying overnight with the EUR crossing as high as 129.25 after the Fed Powell speech.

The USD/CNY slumping slighting after the Fed Powell speech, with an estimated range 6.9300- 6.9450.

It’s expected the most significant moves will be seen after the Federal meeting on Friday.

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