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AUD/USD finds temporary relief - BTMU

FXStreet (Guatemala) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ noted that AUD/USD had rebounded modestly in the Asian trading session after falling yesterday to its lowest level against the US dollar since July 2010.

Key Quotes:

“The Australian dollar’s initial relief rally late last week following the PBoC’s announcement that it had lowered rates for the first time since July 2012 proved short-lived”.

“The shift in the PBoC’s monetary policy stance appears to have heightened investor concerns over the economic slowdown in China reinforcing selling pressures on the Australian dollar”.

“The price of copper has also fallen back towards the lows from March of this year”.

“Australian dollar weakness has been lagging the deteriorating in Australia’s terms of trade still leaving scope for further weakness ahead”.

“The release overnight of the latest Australian capital expenditure report
for Q3 has brought some temporary relief overnight for the Australian

“The report revealed private capital expenditure increased by 0.2%
in Q3 creating some upside risk to Q3 GDP".

"The fourth estimate of private capital expenditure plans for 2014-2015 was also revised higher to USD153.2 billion which was driven by non-mining sectors. Still investment is likely to remain weak in the year ahead as the capital expenditure plan for 2014-2015 is still 7.5% lower than the same estimate for 2013-2014”.

“The ongoing decline in mining investment will remain a drag on growth”.

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