The Aussie currency stayed close to four-year slump after being pinpointed by sellers in an otherwise meaningless FOREX market prior to the Thanksgiving holiday in the United States.
The Australian dollar dipped almost one US cent to as much as $0.8514 and reached a low that was not experienced since July of 2010.
Statements made by RBA Deputy Philip Lowe contributed to this development although the comments about the dollar currency being overvalued has been the central bank’s line for months.
Right now, the AUD is at the bottom of the G-10 group and is under $70 for the very first time going back to June of 2009.
Meanwhile, the euro was up against the US dollar as traders slowed down bearish positions for the second consecutive session. The single currency last traded at $1.2473 and pulled away from a two-year slump in the $1.2358/60 area.
The dollar index was soft at 87.909 and went down from a four-year high of 88.440
The euro bought 147.15 and reached a trading range just below the six-year peak of 149.12 last week. On the other hand, the dollar was around 118.00 after reaching 118.98 during the previous week.
The rally came after considerable orders for 10 and 30 year Treasury futures in the market.
Stock indexes of the United States moved back from records mainly because of the unanticipated slip in consumer confidence which counterbalanced the quick pace of national economic growth.
Treasuries increased while the US currency weakened.
The price of crude oil plunged to a low in more than four years.
Standards & Poor SPX 500 went down 0.1 percent in New York Trading. It snapped a three-day increase and dropped from a record high at Dow Jones.
The index of STOXX Europe 600 climbed 0.2 percent as the DAX Index of Germany capped the longest streak since May of last year.
10 year Treasury yields declined at least five basis points to 2.26 percent as the European currency strengthened.
The rally of US equities pushed stock valuation to the most expensive point since 2009. S&P 500 trades at 17.2 times the estimated earnings of members. This is up from the multiple of 15.5 in October.
Meanwhile, index on consumer confidence dropped to 88.7 this month from 94.1 in October. The median forecast in a Bloomberg survey called for an increase to 96.
Yields on Treasury notes plunged three basis points to 1.57 percent as the country sold $35 billion worth of securities. It drew a yield of 1.595 percent as against the average projection of 1.613 percent.
Although the trading of February’s Comex Gold futures are lower today; however, next week will be worthwhile watching the market. The weakness of the market today can be caused by the downward main trend of the technical factors on the daily chart that sellers noticed declining on their way to defend the trend inside the retrenchment zone from $1194.10 to $1208.80.
Traders are moving away from tracking the USD and focusing on the stimulus that CB of China provided for the Euro Zone and Japan.
The present strengthening of gold should be looked upon as a short-term counter-trend move due to the hawkish position of Fed Reserves that continues setting up the dollar. Technical considerations may capture a higher market higher if the rate of $1194.10 fails with conviction. Or else, you can witness a mobilization in the bear market.
The strong counter-trend buying by the hedge funds is one factor establishing gold prices. As for now, their involvement has been adequate to finish from 50% to 61.8% that is retraced from the break as of October 21 top at $1256.20 to the bottom of November 7 at $1132.00. In case of shortcoming, these traders may appear to create a possible secondary bearish higher bottom. Bullish traders are waiting for this chart pattern as they expect $1170.00 as the buying for the first level.
On Friday, the Trading Commission Commodity Futures will report on an uplifted exclusive extended stance in gold futures and options to 60,307 on money managers and hedge funds. Since last October, this was the highest level attained. If the funds persist to dissolve shorts and enlarge longer; then look for the extension of the rally.
Asian stocks surged forward with the regional point of reference headed for a three-day improvement. Industrial and consumer shares scaled up as Japanese stocks recovered.
The Asia Pacific Index (MSCI) added 0.1 percent to 140.62 in Tokyo trading. The TOPIX index of Japan moved up 0.7 percent after the Japanese currency waned 0.4 percent against the US dollar.
The KOSPI index of South Korea hardly flexed while the Aussie S&P and ASX 200 Index went down by 0.8 percent. Meanwhile, New Zealand’s NZX 50 Index slipped to 0.6 percent.
Futures for Standard & Poor’s 500 Index showed little changes. Reports are expected to show US economy progressed at a slower rate during the third quarter as against projections while consumer confidence possibly increased this month.
Futures in the Hong Kong Hang Seng Index made no0 significant moves during the latest trading session. Third-quarter economic growth in Singapore moved up to the yearly rate of 3.1 percent and surpassed estimates for a 1.5 percent improvement.
The People’s Bank of China reduced the one-year lending rate by 40 basis points to 5.6 percent. The one-year lending rate is projected to reach 5.35 percent by the second quarter of next year.
Hedge funds were less positive turned on crude oil as the Organization of Petroleum Exporting Countries did not show any hint that it will prevent the skid that sent oil prices to a four-year slump.
The OPEC members are meeting in Vienna two days from now to decide on matters of production after crude oil fell by 30 percent since the middle of this year. Saudi Arabia is among those who are opposing the clamor to diminish output while other OPEC nations like Venezuela want immediate action to prop up prices.
The West Texas Intermediate dropped to $3.33 (4.3 percent) at $74.61 per barrel in New York trading during the period covered by the report of the Commodity Futures Trading Commission. It remained at $74.21 last November 13, the lowest since September of 2010. Futures slid 73 cents to finish at $75.78.
OPEC produces roughly 40 percent of world oil output. This was 30.97 million barrels daily last month and exceeded the 30 million targets for five consecutive months. It has been projected by the International Energy Agency that consumption all over the world will decrease slip by approximately one percent.
Money managers brought down net long positions at the WTI by 4.1 percent two weeks ago.
WTI open interest slid to 1.4 million contracts last November 20, based on exchange data.
The EIA also said that oil output of the US will reach a high of four decades next year as production from shale formations continues to go up.