Forex Flash: No shortage of new bad news in Australia - NAB
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AUD/USD
FXstreet.com (Barcelona) - There is no shortage of 'new bad news' in seeking to explain the latest dip in AUDUSD to below 1.03 and its weakest level in five weeks, says NAB research team.
NAB notes: "This morning's AFR leads with news that following a 20% slump in the iron-ore price in the past month, China is planning to permanently scrap some steel-making capacity. This follows prominence afforded a Bloomberg report overnight suggesting that the discovery of the biggest gas find in a decade along Africa's east cost could imperil some future LNG investment plans in Australia."
"No matter that it requires drawing a rather long bow to get to this conclusion, in particular considering the likely 8-year minimum lead time from gas discoveries to production, but at the moment all the mud being thrown at all things Australia seems to be sticking. This makes it hard to protest too loudly against current market price action" the bank added.
AUDUSD has broken below the 1.03 round number also leaving behind the 200 day moving average. While NAB looks for some support to now be evident in the 1.0250 area, "were this to fail there is nothing by way of obvious technical support until about 1.0170" the bank's research team said.
NAB notes: "This morning's AFR leads with news that following a 20% slump in the iron-ore price in the past month, China is planning to permanently scrap some steel-making capacity. This follows prominence afforded a Bloomberg report overnight suggesting that the discovery of the biggest gas find in a decade along Africa's east cost could imperil some future LNG investment plans in Australia."
"No matter that it requires drawing a rather long bow to get to this conclusion, in particular considering the likely 8-year minimum lead time from gas discoveries to production, but at the moment all the mud being thrown at all things Australia seems to be sticking. This makes it hard to protest too loudly against current market price action" the bank added.
AUDUSD has broken below the 1.03 round number also leaving behind the 200 day moving average. While NAB looks for some support to now be evident in the 1.0250 area, "were this to fail there is nothing by way of obvious technical support until about 1.0170" the bank's research team said.
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