Aussie Dollar Tumbles Following Disappointing GDP Results

AUD

The Aussie Dollar opens in the red across the majors this morning following disappointing GDP data and continuing strikes in  the Middle East as U.S.-Iran peace talks remain in limbo. Asian equities ended mixed yesterday with the Nikkei +2.5%, Shenzhen +0.5% and the Hang Seng -1.5%. Locally the ASX 200 traded higher by 0.7% as energy and materials sectors outperformed at +1.6% and +1.5% respectively. Yesterday, Aussie GDP missed expectations, of 0.5% and printed at 0.3% from a previous 0.9%. The figures confirm a loss of economic momentum and reinforce expectations that the RBA will maintain a cautious policy stance. The RBA has forecast the economy to expand by 1.9 per cent over the year to June, so  a further weakening of the economy in coming months is potentially on the cards. Today, RBA Gov Bullock is due to testify on the recent budget release before the Senate Economics Legislation Committee, in Canberra. 

USD 

AUDUSD opens down this morning at a rate of 0.7129, after USDJPY reached the 160 threshold and prompted warnings from Japanese officials. Tensions in the Middle East continued to simmer overnight weighing on risk correlated assets, and pushing oil higher. On Wall St. the Dow Jones closed -1.2%, the Nasdaq -.9%, and the S&P 500 -.8%. U.S. 10-year yields rose 5bps to 4.49%, while Brent Crude rose 2% to $98 a barrel. Overnight, US ADP Non-Farm Employment Change released and showed an increase to 122k from 105k, modestly beating expectations of 120k. ISM Services PMI printed in the green at 54.5 from 53.6, beating expectations of 53.8, with New Orders beating expectations while Prices Paid and employment were lower than forecast. Today, Unemployment Claims are set to release and are forecasted at 214K, following that some low currency impacting economic data to close the day. All eyes are now on Fridays major Employment data dump from the US.

EUR

AUDEUR opens down roughly 30 points to open at 0.6146. European equities closed in the red too with the DAX -1.3% and the CAC -0.7%. European Final Services PMI released yesterday at 47.7, slightly beating expectations of 46.4. Today, President Lagarde is set to speak at the Women's Networks in the Southern Region Day, in Aix-in-Provence, beyond that a quiet end to the week out of the Eurozone. 

GBP

AUDGBP opens in the red as well at 0.5316. The FTSE also closed down at -0.4%. A quiet week for the Pound, Gov Bailey due to speak in the early hours here on Friday at the Investment Association Annual Conference, in London to close out the week.

NZD

AUDNZD opens in the green at 1.2154 this morning, showing a slight recovery from its recent decline. ANZ Commodity Prices m/m will release later this morning, with nothing major on the horizon for the Kiwi to end the week.