The Australian dollar lost ground on Monday morning in Asia as a decline in Asian stocks reduced demand for higher-yielding currencies. The aussie slumped to a 2-week low against the yen and multi-day lows against the currencies of US and Europe.
The Australian market is trading weak today, tracking weak cues from Wall Street and lower commodity prices. The benchmark S&P/ASX 200 index, which declined to 4,865.6 in early trades, has recovered fairly well and is currently down 7.6 points or 0.2% at 4,892. The broader All Ordinaries index is trading at 4,919, down 10.5 points or 0.2% from its previous close.
Among other markets in the Asia-Pacific region, Japan is down notably with its benchmark Nikkei 225 index losing 1.6%. Malaysia, New Zealand, Singapore and South Korea are down with modest losses.
In economic news, an index measuring inflation in Australia was up 0.3 percent in December compared to the previous month, the TD Securities/Melbourne Institute said today in its monthly gauge. On an annual basis, inflation was up 2.6 percent after adding 2.1 percent in the previous month.
The Aussie plummeted to a 2-week low of 83.32 against the yen around 8:40 pm ET, down 0.7 percent from Friday’s close of 83.88. On the downside, support is likely to be seen around the 82.7 level for the aussie. The pair is presently quoted at 83.43.
Japan is scheduled to release its final figures of industrial production and capacity utilization data for November at 11:30 pm ET. Analysts are expecting the output numbers to show little change from the preliminary figures released earlier this month. Production was said to gain 2.6 percent on month but shed 3.9 percent on year, while capacity utilization was up 0.2 percent on month.
Against the US dollar, the Australian currency fell to a 6-day low of 0.9177 in early Asian deals on Monday and this may be compared to last week’s close of 0.9239. The aussie-buck pair moved sideways thereafter and is currently quoted at 0.9191. The next downside target level for the pair is likely seen at 0.914.
JP Morgan company’s fourth quarter earnings results that fell below markets expectations sparked concerns about the pace of the economic recovery and has pushed the safe-haven greenback higher.
The Australian dollar trended lower against the NZ dollar in the session. The aussie-kiwi pair is presently trading near Friday’s closing value of 1.251 and moving a few pips lower may bring the pair down to its lowest level in 4 days.
The Australian dollar depreciated 0.7 percent to a 4-day low of 1.5637 against the European currency by 9:30 pm ET from Friday’s 4-day high of 1.553. The euro-aussie pair that closed last week’s deals at 1.5584 is presently worth 1.5628 with 1.579 seen as the next target level.
From Europe, the Italian Trade balance report will be released at 4:00 am ET Monday.
The US financial markets are closed today for Martin Luther King Jnr Day.