Market Highlights
- Local CPI due out at 11:30 am
- USD hits two-week highs against euro
- U.S consumer confidence falls sharply in October
The Australian dollar stayed well below recent 14 month highs overnight hurt by profit taking and a broadly stronger U.S. dollar. The Aussie traded as low as $0.9125 on Tuesday as the U.S. dollar rallied after consumer confidence data for October deteriorated sharply, reviving worries over the pace of an economic rebound.
The Conference Boards index of consumer confidence fell to 47.7 in October, weaker than the consensus expectation of a reading of 53.1, with confidence pressured on growing concerns that job market conditions would worsen in the near term. With consumers being the backbone of the U.S. economy, a weak confidence report bodes ill for the economic recovery as it indicates restrained consumer spending.
In Australia, all eyes today will be on the third-quarter consumer price index numbers due at 11:30 am, with the number assuming greater significance after recent Reserve Bank commentary turned towards inflation from supporting growth.
By Michele Dri, Senior Corporate FX Dealer
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