Article by ForexTime
The Australian dollar rose 0.4 per cent after minutes from the Reserve Bank of Australia’s last meeting highlighted “positive” domestic data, making the case for further easing more difficult. Meantime, the government unveiled its Mid-Year Economic and Fiscal Outlook, saying the budget deficit is expected to worsen to A$37.4bn in the 2015/16 fiscal year, versus the A$35.1bn forecast provided in May.
Equity markets in Asia-Pacific were struggling to recover from Monday’s losses owing to further declines in the resource space.
Japan’s Nikkei 225 average fell 0.7 per cent and the broader Topix lost 0.8 per cent by midday, led by materials stocks. So far this month mining stocks in Japan have fallen more than 6 per cent.
Sydney’s S&P/ASX 200 was flat, with a 0.3 per cent loss in materials stocks preventing a gain. Hong Kong’s Hang Seng Index edged up 0.5 per cent, while the Shanghai Composite held onto a 2.5 per cent gain on Monday.
The cautious tone of trading makes sense as investors wait for the Federal Reserve to decide whether it will lift interest rates for the first time in a decade on Wednesday. Some analysts say a decision for “lift-off” has already been priced in, as the chances of a move are 76 per cent in the swaps market. The US dollar index was down 0.1 per cent in Asian trading.
Free Reports:
Further pressure in oil markets pushed Brent crude prices to a fresh seven-year low, weighing on equity markets, while China’s central bank kicked the renminbi lower for a seventh straight day.
Overnight the price of Brent crude, the international oil price benchmark, touched a fresh seven-year low of $36.33, amid persistent expectations that global supply would continue to outstrip demand. But a recovery late in the US session helped the S&P 500 to emerge from the red and post a 0.5 per cent gain to 2,021.94. West Texas Intermediate, the US benchmark, staged a 1.9 per cent gain on Monday, ending a six session losing streak.
In Asia trading, however, both benchmarks were back in retreat. Brent was down 0.2 per cent at $37.83 a barrel, while WTI fell 0.1 per cent to $36.26 a barrel.
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