Aussie Dollar Loses Ground despite Economic Data

Points to consider with the Aussie Dollar:

• The pace of deceleration of the Australian construction sector continues to slowdown.
• The December print of the Performance of Construction Index came in at 47.
• The Aussie Dollar (AUD/USD) remained in its post US NFP bearish trend.

This morning The Down Under released construction data that showed this sectors pace of slowdown is continuing to decelerate. However this did little to sway the Aussie Dollar bulls to jump in with buy orders as the new week got under way.

 The Performance Construction Index, which is run by the Australian Industry Group, printed at 47 for the month of December. This is better than the November print of 46.6 but still below the 50 level which separates contraction from expansion. This is index is running side by side with various purchasing managers’ indices around the world that have shown improvement over the last three months. The data showed that residential construction offset falloffs in other sectors. This is indicative over the Australian economy trying to reset itself away from its mining industry into other goods and services.

Aussie Dollar Remains under Pressure

This morning, the Aussie Dollar remained under selling pressure against the US Dollar. Friday’s all-watched non-farm payroll report was underwhelming, to say the least. However, the improving wage outlook kept the hopes of another Federal Reserve rate hike very much on the radar. This has helped to bring the Dollar bulls back into the trading picture and the sawbuck has gained some ground.

It is also likely that today’s construction data was released into a thin market. The trading desks in Japan were empty thanks to a public holiday this morning. At the time of the release the Australian Dollar had fallen to 0.7288 from 0.7291.

It should also be pointed out, that the sentiment linked Australian Dollar should see more volatility as the approaching US Presidential Inauguration is approaching on January 20.