Forex: AUD/USD – Pair falls on BlackRock picking $0.80 per AUD

on Jul 24, 2013
Listen Wednesday July 24th: The Australian dollar has come under strong selling pressure in the American session today, with the pair declining to 0.9189 after being as high as 0.9317 in Asian trading. A major influence has been the weak Chinese manufacturing and labour update published earlier in the day.

The preliminary reading of HSBC’s China Manufacturing Purchasing Managers Index for July came out at 47.7, down on June’s 48.2 and an 11-month low. Analysts had been expecting the index to rise to 48.6.
The employment sub-index fell to 47.3 in July, its lowest level since March 2009. The index has now been below 50 for four straight months.
A sell-off of the aussie then continued after BlackRock Inc., the world’s biggest fund manager, said that the AUD may drop to 80 cents American in the coming nine months.

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Add to which the growing speculation that the Reserve Bank of Australia will cut its benchmark rate at its August meeting and the aussie’s fall this year, some 11 percent so far, may still have further to go. Stephen Miller, a Sydney-based Blackrock director, said in an interview yesterday: “We prefer to be sellers of the Aussie dollar still.”

Meanwhile, Australia’s CPI for the second quarter showed underlying inflation unchanged at 0.4 percent, against 0.5 expected. The RBA’s quarterly trimmed mean CPI, which excludes most volatile items, increased to 0.5 percent in Q2, matching forecasts and up on 0.3 percent in the previous quarter.
Annualised, the CPI stood at 2.4 percent, below the expected and prior 2.5 percent. The trimmed mean figure for Q2 y/y came out at 2.2 percent, versus the 2.2 percent expected and in the prior quarter.


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