The Australian dollar dropped today, paring its short-lived rally, as the nation’s leading indicators fell, suggesting that Australia’s economic recovery has not yet gained firm footing. Not all today’s economic data was bad though.
The Westpac-Melbourne Institute Leading Index of Economic Activity fell to -1.16 percent in April from +0.03 percent in March. The report said:
This is a sharply weaker reading that points to a significant loss of momentum. The May Leading Index reading is the weakest since late 2011.
At the same time, the report explained that “some factors contributing to the current slowdown may prove to be temporary”.
As of the good news, the seasonally adjusted value of construction work done rose 0.3 percent in the first quarter of 2014 from the previous three months, while analysts’ have expected a decline at the same rate.
AUD/USD dropped from 0.9257 to 0.9226 and AUD/JPY fell from 94.40 to 94.05 as of 12:25 GMT today.
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