Money: Australian dollar drops, ASX expected to recover after global sell-off - PressFrom - Australia
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MoneyAustralian dollar drops, ASX expected to recover after global sell-off

18:32  06 december  2018
18:32  06 december  2018 Source:   msn.com

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The Australian dollar has been tumbling since yesterday's worse-than- expected GDP figures were released, and European markets continue to tumble on US-China trade worries.

This caused the Aussie dollar to fall yesterday and into today, slipping to be worth 68.87 US cents early on Friday, the Of course, the dollar could be just blipping below 70 and might recover . But if Donald Trump’s trade war continues, we might have The big players on the asx on friday.

Australian dollar drops, ASX expected to recover after global sell-off© Provided by ABC Business The Australian dollar fell sharply after traders digested yesterday's worse-than-expected economic-growth figures.

It tumbled to 72.68 US cents, 57.08 British pence and 64.07 euro cents at 8:00am (AEDT) — down by about 1 per cent against the major currencies.

The nation's gross domestic product (GDP) came in at 2.8 per cent, its slowest annual pace in two years and far below market expectations.

However, the local share market is expected to fare slightly better, according to ASX futures.

After tumbling by more than 1.5 per cent in the past couple of days, the Australian bourse is expected to rise 0.2 per cent at the open.

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Aussie shares fall on global tensions; New Zealand down. Australian shares tumble after global sell - off Meanwhile, the Australian dollar slipped to 72.3 US cents after the greenback recovered from a After the Coles demerger, the conglomerate is expected to earn substantially less revenue.

The global market sell - off continued overnight, with Wall Street falling sharply amid a volatile The Aussie continues to recover ground as the week advances, and is buying 71.02 US cents on Dow Jones drops almost 500 points after major stock market. American stocks joined a global selloff that

Retail and trade in focus

The Australian dollar's movements will likely be affected by today's economic figures.

The Bureau of Statistics will release its latest retail sales figures for October.

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Talking points – asx 200, australian dollar , RBA. Australian rate futures markets have started to tentatively price in lower interest rates. Leveraged trading in foreign currency or off -exchange products on margin carries significant risk and may not be suitable for all investors.

The Australian dollar tumbled to a three-and-a-half-year low after figures showed the Chinese economy was slowing more than expected . Australia 's benchmark ASX 200 stock index followed the dollar downwards at 5251 on Friday afternoon, a drop of 11 points, as global markets saw a sell - off

Reuters-polled economists are expecting a very small increase, up by just 0.2 per cent.

"We expect that department store sales remain soft and household goods sales growth is likely to have slowed, given lower housing turnover," said Ray Attrill, NAB's head of foreign exchange strategy.

Australia's trade balance figures — which measure the difference in value between imported and exported goods — are also out today.

The consensus estimate from analysts is a $3.2 billion surplus.

"Solid growths in resource exports are likely to have more-than-offset a modest decline in imports," Mr Attrill said.

"Port shipments data reveals a lift in coal and LNG exports in particular, and the volatile non-monetary gold component is expected to have bounced up."

US worries spread to global markets

Meanwhile, it was a quiet night on global markets, with Wall Street closed for a national day of mourning for former president George HW Bush.

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The ASX was hit by a monster wave from Wall Street, sending the major banks, the big miners and tech stocks into Share markets across Asia were smashed as the sell - off spilled over into the new trading day. There has been no clear trigger for the sell - off but markets have been concerned about about

The Aussie dollar dusted off its holiday blues and recovered from a 10-year low to start the first major working The Australian dollar has gone from zero to hero, starting the new week higher and adding to Fed Chairman Jerome Powell said despite turbulence in the markets, the overall global economy

However, the previous day, US markets suffered their worst sell-off since October — the S&P 500 lost $US820 billion in value, while the Dow Jones plunged by almost 800 points.

The negative sentiment from US markets spread to European markets overnight.

The major indices — London's FTSE (-1.4pc), Frankfurt's DAX (-1.2pc) and Paris' CAC (-1.4pc) — experienced steep falls.

One reason behind the continued selling is rising doubts about whether the United States and China can reach a deal within their 90-day "trade truce" period.

Another factor was the American recession fears, signalled by the US Treasury bond market.

Analysts have pointed specifically to the narrowing difference between short-term (two-year) interest rates, and longer term (five and 10-year) bond yields.

The long-term rates are supposed to be higher to reflect expectations of continued economic growth and the opportunity cost of parking money for long periods of time.

But the return on two-year bonds (2.8pc) has now surpassed the five-year rate (2.79pc), and is not far behind the 10-year yield (2.92pc).

A flattening or "inverted" yield curve — in which short-term rates are higher than long-term rates — can signal an economic slowdown.

Historically, this "inversion" trend occurred prior to the US recessions of 1990, 2001 and 2007, under the Bush Sr and Bush Jr presidencies.

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