Fundamental Comment

Australia’s dismal data, dollar consolidation push Aussie lower

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The Australian dollar today completed four days of decline to hit its lowest level this week, with negative pressure from Australia's downbeat economic data and the dollar's consolidation after the Federal Reserve’s meeting.

The AUDUSD traded at a low of 0.8007 after opening the day at 0.8053, while it is currently trading at 0.8010.

Building approvals in Australia fell 20% in December from a revised 12.6% rise, where expectations were in favor of 7.6% drop. The annual index slipped 5.5% from a previous rise of 18.1%.

The data caused a significant decline in Australian dollar despite the stability of China's PMI Caixin manufacturing data, which stabilized in January at 51.5, unchanged from the previous reading and matching expectations.

The U.S. dollar gained slightly against a basket of major currencies, as the dollar index traded at 88.95 after recording a high of 89.16.

The Fed meeting on Wednesday pointed to the strength of growth levels and recovery in household spending and investment, in light of low unemployment rates.

The central bank noted that the economic situation would allow for a gradual rise of interest rates and further monetary tightening this year, especially with expectations of higher inflation during this year near the target set at 2%.

Looking ahead, the US will release the famous jobs report on Friday, where it is forecast show a job gain of 181,000 last month with unemployment lingering at 4.1%.

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