The Australian dollar has drifted higher today on the back of disappointing data out of the US yesterday.
At 7.26am (GMT) the Aussie dollar was trading at US78.75c up from US78.45c in yesterdays close.
Orders for durable goods fell to a seasonally adjusted -1.4 per cent in February from the previous month, the Commerce Department reported on Wednesday. Excluding transportation orders the figure fell -0.4 per cent, racking up 5 months of continuous declines.
Although the numbers were disappointing there were some external factors at play like the unusually harsh winter that has appeared for the second consecutive year,
"You hate to blame it on weather for the second year in a row, but it has been the second year where it's been unusually cold," said Michael Feroli, chief U.S. economist at J.P. Morgan Chase.
"First quarter of last year people were skeptical of that, but then we saw in the second and third quarters a pretty strong rebound, which I think was consistent with weather being a drag." he said
Jeremy Cunningham, senior portfolio manager for fixed income investments at AllianceBernstein,,also brushed off the disappointing figures by noting that the US is still on the road to recovery as inflation picks up and the job market gathers momentum,
"We see inflation in the US moving back to the Fed's target of 2 per cent as the economy gathers momentum and, importantly, the labor markets continue to strengthen," he said.
"The Fed place a high level of importance on the relationship between inflation and the US labour market performance." He added
The market is now pricing in a 68% chance that the Reserve Bank of Australia will cut rates again in April by 25 basis points up from 42% the day before the release of the US Feds latest policy meeting which shows the RBA may becoming a little nervous on the US central banks wait and see approach on lifting interest rate
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