Pressure on copper, crude oil and iron ore prices pushed the Australian dollar below 68 US cents in overnight trading. The slip comes despite a weakening US dollar. Yesterday’s increase in Australian unemployment added to the selling as interest rate traders priced an increased chance of an October interest rate reduction.
European markets displayed a growth bias. Shares rose and bonds fell across the continent in calm trading. US markets were flat as defensive Utilities and Real Estate gains offset losses in Financials and Industrials. Asia Pacific futures were slightly higher at the New York close.
Trade negotiations are back on the market radar as officials from China and the US prepare to meet in Washington. Both sides are seeking progress ahead of higher-level talks due at the beginning of next month.
The People’s Bank of China is expected to lower its one and five year Prime Loan rates by five basis points, after the central bank declined to change other rates this week following the US Federal Reserve’s cut. An accommodative PBoC could lift investor enthusiasm.