Finance Finance News Australian dollar plummets, ASX expected to recover after global sell-off

Australian dollar plummets, ASX expected to recover after global sell-off

The local currency tumbled against the greenback, sterling and euro. Photo: ABC
Twitter Facebook Reddit Pinterest Email

The Australian dollar fell sharply after traders digested yesterday’s worse-than-expected economic-growth figures.

It tumbled to 72.68 US cents, 57.08 British pence and 64.07 Euro cents at 8:00am (AEDT) — down by about 1 per cent against the major currencies.

The nation’s gross domestic product (GDP) came in at 2.8 per cent, its slowest annual pace in two years and far below market expectations.

However, the local share market is expected to fare slightly better, according to ASX futures.

After tumbling by more than 1.5 per cent in the past couple of days, the Australian bourse is expected to rise 0.2 per cent at the open.

In local economic news, the Bureau of Statistics will release its latest retail sales figures for October.

Reuters-polled economists are expecting a very small increase, up by just 0.2 per cent.

Markets at 8:00am (AEDT):

  • ASX SPI futures +0.2pc at 5,675, ASX 200 (Wednesday’s close) -0.8pc at 5,668
  • AUD: 72.68 US cents, 57.08 British pence, 64.07 Euro cents, 82.29 Japanese yen, $NZ1.05
  • US: (closed for national day of mourning for former President George HW Bush)
  • Europe: FTSE 100 -1.4pc at 6,922, DAX -1.2pc at 11,200, CAC -1.4pc at 4,944, Euro Stoxx 50 -1.2pc at 3,150
  • Commodities: Brent crude -0.6pc at $US61.70/barrel, spot gold -0.1pc at $US1,237.06/ounce, iron ore +0.3pc at $US67.38/tonne

Meanwhile, it was a quiet night on global markets, with Wall Street closed for a national day of morning for former president George HW Bush.

But in the previous day, US markets suffered their worst sell-off since October — the S&P 500 lost $US820 billion in value, while the Dow Jones plunged by almost 800 points.

The negative sentiment from US markets spread to European markets overnight.

The major indices — London’s FTSE (-1.4pc), Frankfurt’s DAX (-1.2pc) and Paris’ CAC (-1.4pc) — experienced steep falls.

One reason behind the continued selling is rising doubts about whether the United States and China can reach a deal within their 90-day “trade truce” period.

More to come.