Australian dollar preserved losses against its US rival on Tuesday, after a survey on business confidence and business conditions in Australia, conducted by the National Australia Bank (NAB), revealed mixed results.
AUD/USD slid to a session low at 0.9076 during the early phase of Asian trade, after which consolidation followed at 0.9096, losing 0.16% for the day. Support was likely to be found at December 5th low, 0.9004, while resistance was to be met at December 9th high, 0.9130.
According to a survey by the National Australia Bank (NAB), the gauge of business confidence in Australia in November showed a reading of +5, down from +6 during the preceding month, while another gauge for business conditions in the country improved to -3 in November from -4 in October. Values above zero are usually an indication that the number of optimistic respondents in the survey exceeds the number of pessimists.
Australian dollar lost ground after Federal Reserve Bank President for St. Louis James Bullard said on Monday that central banks decision to taper was close, after employment data in the United States demonstrated a certain improvement.
“A small taper might recognize labor market improvement while still providing the Committee the opportunity to carefully monitor inflation during the first half of 2014”, James Bullard said in prepared remarks. “Should inflation not return toward target, the committee could pause tapering at subsequent meetings.”
On Friday it became clear that US economy managed to add 203 000 new jobs in November, after the number of added jobs in October has been revised down to 200 000 from 204 000 previously. Experts had projected that private sector in the country will add 183 000 job positions in November.
The Federal Open Market Committee (FOMC) may begin to scale back the 85-billion-USD monthly asset purchases at the meeting on policy on December 17th-18th rather than wait until January or March, according to 34% of economists, participated in a survey conducted by Bloomberg on December 6th. In Novembers survey 17% of respondents projected a tapering in December.
Meanwhile, the Aussie was losing ground against the New Zealand dollar, with AUD/NZD cross down 0.25% on a daily basis to trade at 1.0980 at 7:37 GMT, after on Monday the pair reached a low unseen in five years at 1.0950. “Fundamentally, the market is still pricing in hikes in New Zealand and cuts in Australia, so clearly the trend is going to be lower on Aussie-kiwi,” said Tim Kelleher, head of institutional foreign-exchange sales at ASB Bank Ltd. in Auckland, cited by Bloomberg News. Central banks in both countries “know that U.S. stimulus tapering is coming sooner rather than later so they would be expecting U.S. dollar strength in the new year.”
EUR/AUD pair was advancing 0.33% today to trade at 7:42 GMT.
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