Dollar lower ahead of key data


digital, dataThe Australian dollar is lower as traders await more information on the state of the US economy.

At 0700 AEDT on Tuesday, the local unit was trading at 95.69 US cents, down from 96.05 cents on Monday.

The US retail figures for September are due out on Tuesday night, Australian time.

The US Federal Reserve is expected to make an announcement, early on Thursday morning (AEDT) after its two-day policy meeting, on the timing of the winding back of it economic stimulus program.

BK Asset Management managing director Kathy Lien said the Fed was not expected to taper its bond purchasing program this year but its thoughts on the American economy would be closely watched.

“If consumer spending slows alongside job growth, the central bank could downgrade its description of the economy,” she said from New York.

“The last time that the Fed met, they said the housing market was strengthening and the labour market is showing further improvement but, unfortunately, both parts of the economy have deteriorated since then.”

Ms Lien said the American retail spending figures would be crucial for the currency market.

“We are seeing a little bit of pressure on currencies in general because there are fears that the US retail sales numbers won’t be as good as the market is looking for.

“It’s a big week for currency markets and today’s price action represents more hesitation as we wait for more significant data.

“Today is just the calm before the storm.”

In Australia on Tuesday, Reserve Bank of Australia governor Glenn Stevens will give a speech to Citi Group’s Australian & New Zealand Investment Conference in Sydney.


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