The Australian dollar fell today versus the euro and the Japanese yen, staying flat against its US counterpart at the same time. It is a puzzling behavior as today’s economic report was good, while yesterday’s data was bad but did not prevent the Aussie’s rally.
Today’s data about private sector borrowing showed an increase by 0.5 percent in April, while analysts expected a 0.4 percent increase — the same as in March. Growth of private borrowing is considered to be good for an economy as usually the more consumers borrow, the more they tend to spend. Yesterday’s report showed that total new capital expenditure dropped by 4.2 percent in the first quarter of 2014 from the previous three months on a seasonally adjusted basis.
It is surprising to see that the Australian dollar demonstrated a strong rally after the bad data but was falling after the good report. The potential reason for today’s drop may be profit-taking after yesterday’s big gains. Whatever the case, the Aussie was still heading for a weekly gain.
AUD/USD was at 0.9304 as of 18:34 GMT today after rallying from 0.9235 to 0.9306 yesterday. EUR/AUD advanced from 1.4612 to 1.4658. AUD/JPY dropped from 94.72 to 94.43 intraday but bounced to 94.65 by now.
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- May 30, 2014
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