Australian Dollar Opens Weaker on the Back of the European Summit
Bell FX Currency Outlook: The Australian Dollar has opened weaker this morning with markets skittish as European leaders commenced their two day summit in Brussels.
Australia: The AUD dipped back below parity overnight against the greenback as risk appetite waned and markets anticipated a limited policy outcome in Europe.
Talk of progress and positive headlines late in the session saw markets pare back sharp losses and the AUD bounce back above parity.
In Australia today Private Sector credit will be released at 11:30am with markets expecting a 0.4% m/m increase. As markets sit on the sidelines and await the final outcome tonight we expect the Aussie to drift lower today.
Majors: US equities pared back earlier losses as the US Supreme Court upheld the landmark Obama healthcare law. US equities declined although pared losses before the close. The Dow Jones fell 0.2% to 12,602 whilst the S&P 500 traded 1% lower throughout the night.
Initial jobless claims for the US printed on market expectations with 386k filing for benefits. European equities were mixed with the German DAX falling 1.3% to 6,150 and the FTSE falling 0.6% to 5,493.00.
Europe seems to be focusing on help for Spain and Italy with EU members agreeing on a EUR 120 billion stimulus package, although Spain and Italy suggested they would not endorse the package unless it included a provision for the EU to purchase sovereign bonds.
Oil prices fell on fears the summit will fail to provide an adequate solution to the debt crisis. WTI futures fell 2.6% to USD 78.4 per barrel and Brent fell 1.5% to USD 92.00 per barrel. Gold prices were also lower overnight closing down 1.4% at USD 1555 per ounce.