AIRLINK 200.75 Increased By ▲ 7.19 (3.71%)
BOP 10.21 Increased By ▲ 0.26 (2.61%)
CNERGY 7.71 Decreased By ▼ -0.22 (-2.77%)
FCCL 40.06 Decreased By ▼ -0.59 (-1.45%)
FFL 16.81 Decreased By ▼ -0.05 (-0.3%)
FLYNG 26.65 Decreased By ▼ -1.10 (-3.96%)
HUBC 132.60 Increased By ▲ 0.02 (0.02%)
HUMNL 13.92 Increased By ▲ 0.03 (0.22%)
KEL 4.65 Increased By ▲ 0.05 (1.09%)
KOSM 6.59 Decreased By ▼ -0.03 (-0.45%)
MLCF 46.74 Decreased By ▼ -0.86 (-1.81%)
OGDC 212.43 Decreased By ▼ -1.48 (-0.69%)
PACE 6.90 Decreased By ▼ -0.03 (-0.43%)
PAEL 41.28 Increased By ▲ 0.04 (0.1%)
PIAHCLA 17.00 Decreased By ▼ -0.15 (-0.87%)
PIBTL 8.11 Decreased By ▼ -0.30 (-3.57%)
POWER 9.42 Decreased By ▼ -0.22 (-2.28%)
PPL 181.46 Decreased By ▼ -0.89 (-0.49%)
PRL 41.78 Decreased By ▼ -0.18 (-0.43%)
PTC 24.70 Decreased By ▼ -0.20 (-0.8%)
SEARL 111.84 Increased By ▲ 5.00 (4.68%)
SILK 1.00 Increased By ▲ 0.01 (1.01%)
SSGC 43.92 Increased By ▲ 3.82 (9.53%)
SYM 18.98 Increased By ▲ 1.51 (8.64%)
TELE 8.87 Increased By ▲ 0.03 (0.34%)
TPLP 12.92 Increased By ▲ 0.17 (1.33%)
TRG 67.47 Increased By ▲ 0.52 (0.78%)
WAVESAPP 11.42 Increased By ▲ 0.09 (0.79%)
WTL 1.79 No Change ▼ 0.00 (0%)
YOUW 3.99 Decreased By ▼ -0.08 (-1.97%)
BR100 12,170 Increased By 125.6 (1.04%)
BR30 36,589 Increased By 8.6 (0.02%)
KSE100 114,880 Increased By 842.7 (0.74%)
KSE30 36,125 Increased By 330.6 (0.92%)
Markets

Aussie dollar sent tumbling on economic slowdown concerns

LONDON: The Australian dollar skidded to a two-month low on Wednesday after evidence of an economic slowdown support
Published March 6, 2019

LONDON: The Australian dollar skidded to a two-month low on Wednesday after evidence of an economic slowdown supported market expectations for an interest rate cut later this year.

Foreign exchange markets were mostly quiet elsewhere, with the U.S. dollar holding near a two-week high after Tuesday's strong service industries and new home sales data, and the euro pausing before Thursday's European Central Bank meeting.

Australian economic growth came in at 0.2 percent in the fourth quarter, below an expected 0.3 percent.

If the Reserve Bank of Australia, which has kept rates at a record-low of 1.50 percent, shifts to a more dovish tilt it would be following other central banks in growing more cautious about the economic outlook. (nRBA)

The Aussie dollar slid 0.8 percent to $0.7028, its lowest since Jan. 4.

Against the yen the Aussie also fell sharply, while New Zealand dollar weakened as worries about the Australian economy spread.

"The key domestic demand components were all weak and our economists suggest the door for rate cuts has opened further," said Adam Cole, currency strategist at RBC Capital Markets.

The dollar index, which measures the greenback against a basket of currencies, was unchanged at 96.898 after hitting a two-week high of 97.008 on Tuesday.

The dollar rose overnight as unexpectedly strong data helped soothe some fears about the state of the world's biggest economy.

The euro slipped slightly to $1.1305, hovering near two-week lows versus the greenback as investors prepare for the possibility that the ECB will on Thursday signal a delay in raising rates until next year. The ECB is also expected to re-launch long-term bank loans soon, to fight an economic slowdown.

"While we know (ECB President) Mario Draghi is the master of suppressing volatility and promoting a weaker euro, the bar is so high for a dovish surprise that even he may struggle to out-dove this market," said Chris Weston, Melbourne-based head of research at foreign exchange brokerage Pepperstone.

Sterling was stuck near one-week lows on profit taking and renewed worries about next week's parliamentary votes on Brexit.

The Canadian dollar traded at C$1.3373, its lowest in nearly six weeks, hurt by a combination of trade troubles, domestic political uncertainty and bets the Bank of Canada could be close to changing its policy direction.

The yen nudged slightly higher to 111.83 yen per dollar .

Copyright Reuters, 2019
 

Comments

Comments are closed.