The Australian dollar hit a six-week trough on Thursday as investors feared tensions over Hong Kong could sour the Sino-U.S. trade talks, while underwhelming economic news at home pulled bond yields yet lower.
The Aussie slipped as far as $0.6764 at one point after U.S. President Donald Trump signed into law congressional legislation backing protesters in Hong Kong. That provoked a warning from China's Foreign Ministry that Beijing would take "firm counter measures" against interference.
Adding insult to injury, data showed Australian business investment dipped 0.2% in the third quarter and a sharp drop in equipment spending likely dragged on economic activity. That was a black mark for gross domestic product (GDP) figures due next week that are expected to show another quarter of only modest growth.
The poor outlook only added to speculation of further rate cuts from the Reserve Bank of Australia (RBA) and futures are now fully priced for an easing to 0.5% by April. They also imply a 54% chance of yet a further move to 0.25% by the end of next year.
Bonds extended their rally as yields on 10-year paper hit a six-week low of 1.036%, a sharp turnaround from a 1.34% top earlier this month.
Across the Tasman, the New Zealand dollar was enjoying a run of better economic news as a survey of businesses showed a marked improvement in mood this month. The kiwi dollar held firm at $0.6423.
25 Jun 2021 11:12 AM
Gold advanced today and was set for its first weekly rise in four as the U.S. currency weakened, with market participants focusing U.S. inflation data after mixed signals from Fed officials on interest rate hikes.
25 Jun 2021 10:36 AM
Check how the Indian markets started their day
25 Jun 2021 09:09 AM
The Indian rupee is expected to appreciate against the U.S. currency following a rise in Asian currencies and equities on upbeat economic outlook.
25 Jun 2021 07:30 AM
Check What Happened Overnight In Financial Markets
24 Jun 2021 06:35 PM
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24 Jun 2021 03:55 PM
The Indian rupee strengthened for the second straight day against the U.S. dollar and closed higher at 74.16, aided by strong portfolio equity inflows.