AUD/USD falls through key support after weak Aussie data
EUR/USD continues tight range trade. Goldman Sachs sees growth strongly picking up steam. US retailer Q3 results say more about company performance than overall retail sales outlook.
The Aussie dollar failed to hold key support levels in late New York trade Thursday after data on the Aussie economy came in on the weak side.
AUD/USD fell through key 100-day support around $0.6800, a selloff aided by the data. The Aussie dollar was trading around $0.6790 against the greenback late in New York.
The Flash Purchasing Manager’s Index (PMI), which gives insight into manufacturing health, came in at 49.9 for October, just slightly below the 50 level that indicates contraction. The Flash Services Index, which gives an insight into the much larger services part of the economy, fell to 49.5 last month from 50.1 in September.
EUR/USD continued its tight range trade with a downside bias after influential US investment bank Goldman Sachs issued an upbeat forecast for the US and global economy.
Saying that the worst of the economic slowdown in recent months is likely behind us, Goldman’s forecast, especially for the US, is strongly bullish and well above the consensus estimates of other forecasts.
Goldman sees US growth in 2020 coming in at 2.3%, and global growth at 3.4%.
After US employment data released earlier this month showed sharp upward revisions in previously weak summer numbers, there has been a sea change in attitudes about the US economy. Consensus has gone from recession quite possible to recession unlikely.
Third quarter numbers from top US retailers have had see-saw impact on forex markets this week.
Early on, numbers from department store chain Macy’s and home improvement giant Home Depot were worrisome leading some to think that a weak retail sales environment was in the offing. But the next day gangbuster numbers from Target and strong results from Home Depot competitor Lowe’s reversed that view.
But traders shouldn’t read too much into the retailer results numbers, as they are more indicative of company and marketplace micro developments than macro overall retail sales health.
Department store giant Macy’s poor showing has more to do with shifts in the retail marketplace, specifically a massive slowdown in shopping mall traffic, where Macy’s stores are located, in the age of Amazon and the growth of online retail.
Lowe’s has been better at tweaking its merchandising and has been gaining market share vis-à-vis Home Depot, attracting high value and recurring contractor business.
And Q3 showed why Target is considered quite possibly the best managed retailer on the planet. The US’s second largest store chain it homeruns in every possible metric, blowing past Q3 estimates and raising future guidance. The stock soared 15% on the results.
This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.8 pips on EUR/USD
- Analyze market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on the most popular forex markets