Australian dollar rises
Yesterday, the local currency was holing near one-week lows as renewed worries about global growth had investors flocking away from risk assets.
The Australian dollar slipped to 71.60 US cents on Thursday, a level not seen since January 9, and was last fetching 71.66 US cents.
The antipodean currencies started the year on a firmer footing after a battering in 2018, but heightened anxiety a protracted Sino-US trade war could see a sharp slowdown, or even a recession, in the world’s biggest economies is clouding the outlook.
Economist John Kemp, a Reuters columnist, on Thursday predicted the global economy was headed for a recession this year, with the OECD’s composite leading indicator falling to just 99.3 points in November – its lowest reading since October 2012.
Worryingly, data out from Singapore showed the city-state’s exports plunged the most in more than two years in December in a sign of increasing strain in global trade and demand.
Many economists expect the Sino-US tariff war to hurt other trade-heavy economies including Australia.
And, data showed pressure building on the local economy.
Data out on Wednesday showed a gauge of consumer confidence slid 4.7 per cent in January, from February, to post its sharpest decline in over three years.
The Australian economy has been expanding at a decent pace but there are hardly any signs of inflation with wage growth remaining weak despite strong labour markets in both countries.
The central bank is widely expected to keep rates at record lows for some time yet, with odds increasingly turning in favour of cuts in the face of downbeat global sentiment.
Australian government bond futures edged lower, with the three-year bond contract and the 10-year contract off half a tick each at 98.230 and 97.72.
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