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.

The dollar recovered on Thursday as caution before a G20 meeting prompted investors to buy back the The Democratic Party is expected to win control of the U.S. House of Representatives, with The dollar dipped on Monday after three consecutive weeks of gains as investors took profits before

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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Examine the current Australian Dollar US Dollar rate and access to our AUD USD converter, charts, historical data, news, and more. AUD /USD Overview. The Aussie is the sixth-most-traded currency in the world, popular with forex traders due to the high interest rates in the country.

Australian Markets. ASX struggles after b rout. THE share market has eked out modest gains after a choppy morning of trade following THE Australian share market looks set to open half a per cent higher after comfortable rises on key overseas indexes and another record higher for the Nasdaq.

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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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The Australian dollar has slipped to a six-week low against its US counterpart, before regaining some ground, as the US dollar (But) Westpac expects a 1.5 per cent drop with financing holding up better than expected through 2017's slowdown Search ASX quotes. Find by company name or ASX code.

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 fell by 0.8 per cent and the local dollar took a hit on concerns about the Australian and US economies. US stocks sold off heavily on Tuesday as sentiment over the US-China deal switched and the flattening bond yield curve spooked investors on Wall Street.

Global Issues remain. I expect the Trade Wars will continue to provide concern, it seems more likely than My general expectation is that the pound will rise further against a weaker AUD if the global For clients with a position selling Australian dollars for pounds, I feel gearing up to capitalise on the

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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