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Australian dollar breaks 4 day winning streak
Published on 30.11.2016 08:20

The Australian dollar has broken a 4 day winning streak in today’s trading against its US counterpart on the back of strong data out of America, which may have set the stage for more than one rate hike from the US Federal Reserve in the coming months.

Disastrous real estate data released earlier today also put pressure on the local currency.

At 4.02pm (AEDT) the Aussie dollar was trading at US74.72c down from US74.82c in yesterday’s trading.

Gross Domestic Product in the US jumped to 3.2 percent on an annual basis from a previously reported 2.9 percent, the Commerce Department said on Tuesday, marking the strongest growth since 2014.

Analysts now predict the Fed has more evidence of a stronger economy and a reason to hike rates further after next month’s widely expected move.

“These improvements confirm that a (US interest) rate hike is coming on December 14th. They also boost the chance of further tightening in 2017,” BK Asset Management’s managing director of foreign exchange strategy Kathy Lien said.

Also pressuring the Australian dollar was the release of the building permits figure which came in at -12.6 percent, which was well below expectations for a figure of 1.5 percent and may raise speculation again for a rate cut from the Reserve Bank of Australia.

 

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Andrew Masters

Analyst

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