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Aussie, Kiwi Lower as Greenback Strengthens

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Currency symbol Australian Dollar made of dark metal in spotlight in front of Australian flag

The Australian and New Zealand dollars were lower against the U.S. dollar on Tuesday after downbeat data out of Australia showed a decline in business confidence. Renewed speculation that the U.S. Federal Reserve will raise rates before the end of the year also boosted the greenback.

The Australian dollar was at 0.7634 against the dollar, down 0.22%. The New Zealand dollar fell to 0.7123 against the greenback, down 0.21%.

The National Australia Bank announced on early Tuesday that its business confidence index tumbled down to 4 in July, lower than the reading of 6 the previous month.

The commodity-driven currencies were also lower due to falling oil prices. Concerns over the oil supply glut offset rumors of a potential agreement to freeze production.

China’s CPI data further weighed on the Aussie and kiwi, which showed a 0.2% gain for the month of July. PPI figures out of the Asian nation showed a dip of 1.7%. Analysts were projecting a 2% decline. Earlier on Monday, China reported dismal imports and exports for July.

China is a major trade partner for both Australian and New Zealand.

Meanwhile, the U.S. dollar index climbed 0.12% to 96.41. The dollar pushed higher against other major currencies overnight, as upbeat job data continued to support the greenback.

The dollar was broadly higher on Friday after a report from the Labor Department showed the U.S. added 255,000 jobs in July, far above the expectations of 180,000 new jobs. The unemployment rate held steady at 4.9%. The report also showed that average hourly earnings jumped 0.3%, higher than the expected 0.2% gain.

The positive jobs data out of the U.S. further boosted speculation that the Federal Reserve would raise rates before the end of the year. Fed funds futures are now pointing to a 50-50 chance of a rate hike, which further weighed on sentiment for the Aussie and kiwi.

 

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