Australian dollar dips ahead of economic data

Australian dollar dips ahead of economic data

The US growth data is due to be released Thursday, but markets have been rattled by a slew of soft business indicators in Europe that snuffed out a rally in risk assets on Friday.

An energy crisis is also a concern over the euro, while the trade sensitive Australian and New Zealand dollar has backed away, making one-month highs on Friday.

The Aussie edged 0.5 per cent lower to $0.6892 and the kiwi was down by the same margin to $0.6223.

Australian consumer price data is due on Wednesday, and a hot number could lend support by ramping up bets on rate hikes, though analysts warned the backdrop was mostly negative.

The Australian dollar will be a function of the world's economic outlook, said Joe Capurso, head of international economics at the Commonwealth Bank of Australia.

The Aussie has more upside risk than downside risk and can test $0.6800 this week, according to the darkening outlook. Even as markets reckoned that the Bank of England would lift rates by 50 bp next week, sterling fell on Monday, even as markets reckon on a 60 per cent chance that it will lift rates by 50 bp next week. It was down by 0.3 per cent to $1.1970 at the end of the day.

The price of cryptocurrencies hovered at $22.278. The dollar went up 0.4 per cent to buy 0.9641 Swiss francs. The US dollar index was at 106.840, just below a two-decade high made in mid July at 109.290.