Free Subscription

  • Access 15 free news articles each month

Professional

Try one month for $5
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • Exclusive Masterclass access. Part of Retail Week 2021

Dollar hits one week low

 

Dollar,coin,currency,moneyThe Australian dollar has fallen to a one week low as worries about economic growth in China and Japan escalate.

At 0700 AEDT on Monday, the local unit was trading at 87.38 US cents, down from 87.93 cents on Friday.

Early on Monday morning, it fell as low as 87.33 US cents, its weakest level since October 24.

On Friday, the Bank of Japan surprised markets by announcing an increase to its massive bond buying program to kick start its sluggish economy.

The BoJ said it had ramped up its is bond buying program by as much as 20 trillion yen ($A196.92 billion) a year to 80 trillion yen.

On Saturday, China’s official purchasing managers index (PMI), showed that manufacturing activity had expanded at a much slower pace in October.

OM Financial senior client adviser, Stuart Ive, said both events put the Australian dollar under pressure, as traders move to haven currencies like the US dollar.

“The surprise stimulus saw the US dollar strengthen across the board,” he said.

“Adding those global growth fears was the official Chinese PMI coming in weaker than expected but still in positive territory, people will be wondering if the economic slowdown in China will be worse than expected.”

Ive said the weak Chinese data would prompt a greater focus on HSBC’s manufacturing PMI for October due early on Monday afternoon.

“If that comes in with a weak number, we will see the Australian dollar under further pressure,” Ive said.

“I think markets will be holding off until we see that data.”

He added that the HSBC PMI will be a bigger driver for the Australian dollar than the Australian building approvals data for September, which is released an hour earlier.

AAP

You have 7 free articles.

Webinar is only for Professional subscribers

Become a Professional for only $5 Already member? Login
  • Unlimited access to news,insights and opinions
  • Quarterly and weekely magazines
  • Independent research reports and forecasts
  • Quarterly webniars with industry experts
  • Q&A with retail leaders
  • Carrer advice
  • Exclusive masterclass access.Part of Retail Week 2021