The AUDUSD softened further amidst continuing risk off exits as traders look for safety. US data continues to bolster optimism for a recovering US economy with US Private Payrolls coming in well over economist expectations, increasing by 340k in June. Investors are building confidence for a bold US Jobs report, Non-Farm Payrolls, on Friday. The AUDUSD seems decisively bearish after yesterdays one cent slide, with traders sights now on the 0.65-cent support as commodity prices and equities deteriorate overnight. A breach there would open up a retreat to the 0.6460 level, last seen in May. Any initial gains will be restricted to the previous psychological support at 0.66-cents. For our session today , markets will await the Australian Trade data for June to provide some directional guidance. Bank of England policy meeting tonight, where they are widely expected to raise rates by 25bp once again.
Wall Street indices suffered at the hand of investor nerves, as they digest the Fitch Ratings downgrade for the US and cautiousness ahead of further seasonal corporate earnings reports. The DJI lost -1%, the S&P500 closed lower -1.4% and the Nasdaq shed -2.2% for the session. Australian shares are set to open lower, tracking Wall Street markets, with investors rattled by the timing of the Fitch Rating downgrade to US debt and a pull back on tech stocks ahead of earnings announcements for Apple and Amazon.
Gold prices tumbled as investors position in favour of US-dollars, ahead of the US Non-farm payrolls on Friday night.
Copper prices closed down 1.7%. Dalian Iron Ore prices ended the day lower, though markets are measuring China’s latest policy guidelines and monitoring oversupply concerns.
Brent Crude Oil prices settled lower as traders digest the latest risk moves and stronger US-dollar, all the while US gasoline inventories fell more than forecast in a sign that demand may be starting to pick up over their driving season.