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Currency Market Analysis

Sep 15, 2021 | Currency Market Analysis

Global Themes

AUD lower as US shares fall to two-month lows

• AUD hit by shares selldown
• US inflation eases
• China data key

US shares under pressure

The Australian dollar was mostly lower overnight after another poor session from US shares saw the benchmark Dow Jones index fall to two-month lows.

US shares fell despite a lower-than-expected inflation reading that means there is less pressure on the US Federal Reserve to wind back its bond-buying program.

US shares initially rallied after monthly core CPI was announced at only 0.1% -- well below the 0.3% expected. However, sentiment quickly soured.

The annual US core rate, at 4.0%, remains well above the Fed’s target of 2.0%.

RBA on hold

The AUDUSD fell 0.6%.

The Aussie was also pressured by a speech from Reserve Bank of Australia governor Philip Lowe.

Lowe reiterated his view that Australian rates would remain on hold until 2024.

The AUDEUR fell 0.6% while the AUDGBP lost 0.4%.

The AUDJPY, usually seen as a key measure of risk sentiment, tumbled 0.9%.

Chinese data in focus

The focus today is on Chinese data with industrial production, retail sales and investment number due.

Chinese data has recently slowed and this has contributed to weakness in commodity markets.

These numbers are due at 12.00pm AEST.

Tomorrow, NZ GDP and Australian employment will be closely watched as the two economies sharply diverge.

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