News & Current Affairs
11 September 2014
Aussie dollar falls to six month low
Wall Street extended yesterday’s losses, while a strengthening in the US dollar pushed the Aussie down to its lowest level since March.
The Australian dollar continued its sharp fall overnight because of the rise in the greenback and also the fall in commodity prices, it was worth 91.99 US cents.
The Aussie has recovered slightly, trading at US92.05 at 12pm AEST.
The Dow Jones retreated 0.6 per cent to 17,014.
The S&P 500 lost 0.7 per cent to 1,988.
There was little major news to direct trade, with only small surveys out showing a pickup in small business confidence and a steady number of job openings.
The US dollar continued to rise as markets took the latest paper from the San Francisco Federal Reserve to mean that the market has been underestimating the odds of an interest rate hike sooner rather than later.
The paper, which was published on September 8, says it has concerns about the public misinterpreting signals from the Federal Reserve.
“An ongoing concern has been that the public might misconstrue the Fed’s forward guidance about future monetary policy and under-appreciate the extent to which short-term interest rates may vary with future news about the economy,” it cautioned.
“Evidence based on surveys, market expectations, and model estimates show that the public seems to expect a more accommodative policy than Federal Open Market Committee participants.”
Apple finally ended speculation and rumours overnight, unveiling its first new products since the death of Steve Jobs – a watch and two new handsets, which are larger than current iPhones.
While exciting technology enthusiasts, the market did not really like it and, after a brief rally, Apple shares finished down 0.4 per cent.
Across the Atlantic, the Bank of England’s governor Mark Carney confirmed that the UK’s economic recovery has reached a point where it “has momentum” and interest rates can be raised or “normalised” early next year.
London’s FTSE 100 ended 0.1 per cent lower at 6,829 and the Eurostoxx 600 lost 0.4 per cent to 345.
The Australian share market was set for a poor start to trade; at 8:15am (AEST) the ASX SPI 200 futures index was 0.3 per cent lower at 5,586.
On commodity markets, the spot gold price barely moved overnight and closed at $US1,254.79 an ounce.
The iron ore price edged lower, the Chinese benchmark price is now down to $US83.20 a tonne which is a fresh five-year low.
Oil saw relatively flat trade: West Texas crude oil closed at $US92.68 and Tapis crude was worth $US101.57.