US Dollar Falls to Multi-Decade Low Against Aussie, Sparked by Inflationary Fears
The US dollar recovered from yesterday’s record breaking loss against the euro, but fell to a 26 year low against the Australian dollar as Australia’s core inflation surged to a 17 year high. As a result, the New Zealand dollar advanced as well as the pair traded in the 0.79 range, while the Canadian dollar continued to stack up losses as Canadian Retail Sales dipped for the first time in five months. Against the European currencies, the US dollar advanced against both the euro and British Pound as the pairs fell to 1.58 and 1.98, respectively. As the session came to a close, the US dollar picked up the biggest gains against the low yielding Swiss franc as investors raised their risk appetite, with the Yen also losing ground as the pair rose to 103.50.
Mixed price actions stirred the stock markets ahead of Apple’s earnings report, with Boeing adding to the mix as they announced a 38 percent gain in profits. By the end of the session, the DJIA advanced 42.99 points to 12,763.22 points, with Boeing and Microsoft topping the winners. Among the broader indices, the S&P500 rose 3.99 points to 1,379.93 points amid 223 stocks falling to a new 52 week low.
A rise in risk appetite left US Treasuries struggling to stay afloat, with treasury prices trailing lower as investors fled the safe haven of risk free bonds in hopes of finding greater returns. As a result, the benchmark 10-Year yield rose to 3.745 percent from 3.695 percent, while the 2-Year yield jumped to 2.210 percent from 2.193 percent.
Looking ahead, the Durable Goods Orders index will kick off the morning at 12:30 GMT, and will be followed by the New Home Sales Data at 14:00 GMT. We expect the rise in US exports to lift the durable goods orders to 0.1 percent from minus 1.7 percent, but expect the housing turmoil to persist as we forecast new homes sales to fall 1.0 percent.