Aussie dollar holds above US$0.67

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback, after the release of better-than-expected US GDP data for the second quarter reveals the US economy grew at a faster 2.4% clip than either expectations at 1.8% had predicted, or was the case in the previous quarter (2.0%). Along with an unexpected jump in Durable Goods Orders of 4.7%, stronger-than-forecast labor market data and lower-than-forecast GDP price index, the data suggests the economy is improving. The Aussie dollar rose above US$0.6820 yesterday afternoon and has since fallen over a full cent to just above US$0.67, seeing NZD/AUD push back up through 0.92.

On the local data front yesterday the Australian Bureau of Statistics released the quarterly Import Price Index, which measures the change in the price of goods purchased by importers. Export price index fell 8.5% this quarter and 11.2% through the year, while Import price index fell 0.8% this quarter and 0.3% through the year. The main contributors to the fall were coal, coke and briquettes (-20.6%), driven by lower demand for both thermal and metallurgical coal due to the rapid easing of global supply constraints amid falling demand of gas, natural and manufactured (-20.9%), driven by price falls in oil-linked contract and high European inventories placing further downward pressure on spot prices. Looking ahead today and we will see the release of the Producer Price Index (PPI), a leading indicator of consumer inflation and monthly Retail Sales figures, which is the primary gauge of consumer spending, which accounts for the majority of overall economic activity.