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Forex - Aussie drops further as GDP figures disappoint, labor costs down

Investing.com -

Investing.com - The Aussie fell further in Asia on Wednesday as GDP data came in below expectations as real unit labor costs fell and indicated a lack of wage pressures.

AUD/USD traded at 0.7676, down 0.16%, while USD/JPY changed hands at 102.03, up 0.01%.

In Australia, second quarter GDP rose 0.5% quarter-on-quarter, missing the 0.6% increase seen for a 3.3% year-on-year, below the 3.4% rise expected. Earlier, the AIG construction index for August slumped into contraction at 46.6 from 51.6.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, rose 0.04% to 94.84.

Overnight, the dollar extended losses against the other major currencies on Tuesday, after data showing that U.S. service sector activity grew at a slower pace than expected in August further dampened expectations for a U.S. rate hike before the end of the year. According to Investing.com's Fed Rate Monitor Tool , investors are pricing in an 21% chance of a rate hike at the Fed's September 20-21 meeting in wake of last week's disappointing U.S. employment data.

The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 51.4 last month from 55.5 in July. Analysts had expected the index to drop to 55.0.

The data came after downbeat U.S. employment data published last Friday crushed expectations for an upcoming rate hike by the Federal Reserve. Earlier Tuesday, data showed that German factory orders rose 0.2% in July, confounding expectations for a 0.5% increase. Factory orders ticked down 0.3% in June, whose figure was revised from a previously reported 0.4% fall.

Market participants were looking ahead to the European Central Bank's policy meeting on Thursday, amid speculation over potential stimulus measures.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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