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Aussie a tad weaker as politics eyed, trade data ahead

The Aussie drifted lower and the yen made slight gains in early Asia on Tuesday as politics in Australia dominated sentiment there and investors looked ahead to trade data.

USD/JPY changed hands at 102.54, down 0.04% in early Asia. AUD/USD traded at 0.7352 with markets awaiting the final results of the federal elections and braced for wrangling by lead parties to form a coalition government.

GBP/USD traded at 1.3280, down 0.05%.

In New Zealand, the NZIER business confidence survey for the second quarter reached 19%, from 2% previously, with capacity utilization at 92.9%, a dip from 93.2%.

NZD/USD traded at 0.7217, down 0.12%, after the survey.

In Australia, the AIG services index for June came in at 51.3, a tad down from 51.5 the previous month.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 95.61.

Ahead, Australia reports exports and imports month-on-month for May as well as the trade balance seen at a deficit of A$1.5 billion. The Caixin services PMI for June is due wit the level seen at 52.3, up from 51.2 the previous month. Also in Australia comes retail sales for May with a 0.3% gain seen month-on-month.

Overnight, the dollar slipped back lower against the other major currencies on Monday, as investors remained cautious amid ongoing uncertainty over the global effects of the Brexit vote.

GBP/USD edged up 0.16% to 1.3288, still close to the 31-year low of 1.3122 set on June 27, a level not seen since 1985.

Research firm Markit and the Chartered Institute of Purchasing & Supply said on Monday that their U.K. construction purchasing managers' index fell to 46.0 in June from May’s reading of 51.2. Economists had expected the index to drop to 50.5 in June.

The pound has already been under heavy selling pressure since Britain shocked markets by deciding to leave the European Union, sparking uncertainty over the consequences of the U.K. vote on the country’s economy and the global economy as a whole.

Adding to pressure on the U.K. currency, Bank of England Governor Mark Carney indicated late last week that more stimulus may be needed over the summer, fuelling expectations for an upcoming rate cut.



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