- AUD / USD remains on the sidelines below 007240 after Australian business spending data.
- Capex fell 5.9% in the second quarter against expectations of an 8.4% drop.
- Traders sit on the fence before the Jackson Hole Symposium.
Better-than-expected Australian business spending data released just minutes before press time is struggling to bid under the Aussie dollar.
While business spending, represented by private investment spending (CAPEX), fell 5.9% in the second quarter, the actual reading was better than the expected decline of 8.4%. The third estimate for 3 for 2020-2021 was $ 98,624 million – 12.6% lower than the third estimate for 2019-20. However, the third estimate is 8.9% higher than the second estimate of 2020-2021.
AUD / USD jumped 10 pips to 0.7245 immediately after the release to fall back below 0.7245. The currency pair is now trading largely without a chain on this day. The capex data came a day after Australia reported a 0.7% drop in construction work done – also a key component of gross domestic product.
The lackluster Australian dollar reaction could be attributed to cautiousness ahead of Thursday’s Jackson Hole Symposium, where Federal Reserve Chairman Jerome Powell is expected to signal tolerance for higher inflation. With the conciliatory expectations built in, the margin for disappointment is quite large.
Additionally, capping the rise could be the latest claim that the two-man team sent by the World Health Organization to China to investigate the origin of the coronavirus has not reached Wuhan, the epicenter of the world. virus epidemic. In addition, relations between the United States and China remain strained, although the two sides agreed to work on implementing the phase one trade agreement earlier this week.