Posted on March 4, 2015 by the XM Investment Research Desk at 8:14 am GMT
The aussie returned a small portion of the previous day’s gains, after the country’s GDP report came in slightly lower-than-expectations. The Reserve Bank of Australia had decided to keep interest rates unchanged during its meeting the previous day. The positive contributors to Australian GDP are household spending, real estate and housing construction and exports. Business investment on the other hand is hurting because of the fading impact of the mining boom. The mining investment boom’s effect is mainly felt through higher exports. Australian GDP for the fourth quarter came in at 0.5% quarter-on-quarter compared to expectations of 0.6%. The aussie was last trading at 0.7821 versus the dollar relative to highs near 0.7850 reached during the previous day.
In China, HSBC Services PMI rose to 52 in February from 51.8 the previous month, with new orders being especially strong.
The major dollar pairs of euro / dollar and dollar / yen traded in ranges. The euro made a new 5-week low the previous day at 1.1153 – ever closer to the 11-year low of 1.1096 registered in January. The pair was last trading around 1.1165. The yen managed to resist attempts to drive dollar / yen above the 120 mark and traded around 119.72.
The dollar and the euro are awaiting very important risk events such as the ECB meeting and Draghi’s press conference on Thursday and Friday’s nonfarm payrolls.
Looking ahead, final Purchasing Managers’ Indices (PMIs) for Services will come out for the Eurozone, as will UK services PMI for February. Later on, the ADP private sector payrolls report will be released in the US followed by Markit PMI Services and ISM non-manufacturing.