Australian, NZ Dollars Fall On Risk Aversion, Soft China Data
05 March 2018 - 01:42PM
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The Australian and New Zealand dollars slipped against their
major counterparts in the Asian session on Monday, as China service
sector growth slowed in February and as Asian shares fell amid
fears of a global trade war and Italian elections showing a hung
parliament.
The latest survey from Caixin showed that China services sector
continued to expand in February, albeit at a slightly slower pace,
with a services PMI score of 54.2.
That's down from 54.7 in January, although it remains above the
boom-or-bust line of 50 that separates expansion from
contraction.
Italian elections pointed to a hung parliament, as the results
showed no outright winner.
Exit polls showed that ex-Prime Minister Silvio Berlusconi's
right-wing coalition was likely to win most of votes, but short of
the requisite 40 percent required to form a government.
China's National People's Congress meeting kicked off in
Beijing, with Premier Li Keqiang announcing a boost to military
spending by 1.1 trillion yuan.
Li Keqiang has also set the growth target at 'around 6.5
percent' for 2018. This was unchanged from the last year's
target.
In economic news, the latest survey from the Australian Industry
Group revealed that the service sector in Australia continued to
expand in February, albeit at a slower pace, with a Performance of
Service Index score of 54.0. That's down from 54.9, although it
remains well above the boom-or-bust line of 50 that separates
expansion from contraction.
The Australian Bureau of Statistics said that the total number
of building approvals issued in Australia was up a seasonally
adjusted 17.1 percent on month in January, coming in at 19,851.
That topped expectations for an increase of 5.0 percent following
the 0.2 percent gain in December.
The latest survey from TD Securities and the Melbourne Institute
revealed that consumer prices in Australia are predicted to slow in
February, with prices expected to ease 0.1 percent on month. That
follows the 0.3 percent monthly increase in January.
The aussie dropped to 0.7740 against the greenback, 81.64
against the yen and 0.9986 against the loonie, off its early highs
of 0.7770, 82.07 and 1.0010, respectively. The aussie is likely to
find support around 0.75 against the greenback, 78.00 against the
yen and 0.97 against the loonie.
The aussie slid to more than a 2-year low of 1.5923 against the
euro at the commencement of today's session and held steady
thereafter. The aussie is seen finding support around the 1.61
mark.
The kiwi weakened to 4-day lows of 0.7206 against the greenback
and 1.0743 against the aussie, from Friday's closing values of
0.7240 and 1.0715, respectively. On the downside, 0.70 and 1.09 are
seen as the next support levels for the kiwi against the greenback
and the aussie, respectively.
The kiwi that ended last week's deals at 76.52 against the yen
and 1.7003 against the euro slipped to near an 11-month low of
76.03 and a 4-week low of 1.7097, respectively. If the kiwi drops
further, it may find support around 75.00 against the yen and 1.72
against the euro.
Looking ahead, PMIs from major European economies, Eurozone
retail sales for January and Sentix investor confidence for March
are due in the European session.
In the New York session, Markit's U.S. services PMI and ISM
non-manufacturing composite index for February are scheduled for
release.
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