The Australian dollar suffered another consecutive night of selling pressure as global economic concerns pushed traders to the safety of the US dollar and it slipped back under 1.04 USD early in the European session. The Yen was also a major gainer where its recent depreciation run through February and March has hit a wall of resistance in this last week, with the Australian dollar now buying 86 Yen down from the 88.6 Yen is was buying a ten days ago putting a dent in the carry trade after such a solid run. Performances of US stocks continued the safety play trade theme through their session as both the Dow and S&P fell more the 0.6%, helped by durable goods orders which only increased 2.2% compared to median expectations of a 3% gain.
Efforts to kick-start the UK economy continues to falter as GDP data showed that it contracted 0.3% with the consensus for a 0.2% contraction. The Pound was sold off versus the USD and Euro as traders readied themselves for further Quantitative Easing to be used by the Bank of England this year as it struggles to ignite growth. Although deflationary concerns have eased with inflation figure now slowly falling as predicated, record unemployment continues weigh the economy down.
The local session looks a little grim with no economic data out to spark a chance of a significant bounce with weak equity leads likely keeping the Australia dollar performance flat. In the Asian region we do have Japanese retail sales data to be released at 10.50am with it expected to lower than January's 1.9% rise at 1.4% median expectation. As it customary each morning between the US and Australian session there has been some profit taking and the Australian dollar has risen from overnight lows of 1.03755 USD to be trading at the time of writing at 1.03907.
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