The Australian dollar fell intraday amid risk aversion caused by Iran’s missile attack on US military bases. But by now, the Aussie has managed to recover as investors continued to hope that the conflict will not result in a full-blown war. Currently, the Australian currency is trading about flat against most of its peers, though managed to gain on the euro and the Japanese yen. Domestic macroeconomic data was mixed, but building permits, which are considered to be a more important indicator, came out far above expectations.
The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index dropped from 40.0 to 38.9 in December on a seasonally adjusted basis. The reading below the neutral 50.0 mark indicates a contraction of the sector, and the drop indicates a faster rate of contraction. In fact, that was the sharpest decline during 2019 and the lowest reading since May 2013. The report commented on the result:
Deteriorating indexes for activity, new orders and deliveries from suppliers all indicated a further softening in business conditions across the construction industry.
Across the four sectors included in the Australian PCI®, stable conditions were reported in house building for a second consecutive month. Elsewhere however, continued falls in activity were evident in December across the apartments, commercial and engineering construction sectors.
Meanwhile, the Australian Bureau of Statistics reported that building permits climbed 11.1% in November from October on a seasonally adjusted basis after dropping 7.9% in the previous month. That was a far bigger increase than 2.1% predicted by experts.
AUD/USD traded at about 0.6864 as of 14:31 GMT today, near the opening level of 0.6868. EUR/AUD declined from 1.6231 to 1.6206, retreating from the daily high of 1.6293. AUD/JPY bounced from the daily low of 73.76 to trade at 74.61 after opening at 74.50.
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