The Australian equity market is pointed to a weaker open Wednesday after US stocks finished lower on mixed bag of earnings reports failed to stem investor caution over the deadlock in Washington’s debt negotiations.
The Dow closed down 91.50 points to settle at 12501.30, its third straight decline and fourth loss in five sessions, this means that the Dow has dropped 1.75% this week. The S&P500 index fell 5.49 points to 1331.94, as industrial and material stocks declined. “Short-term traders are taking bets one way or another ahead of a debt-ceiling announcement,” said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management. “When a deal isn’t announced, people are taking positions off the table at the end of the day. This light-volume, choppy environment will continue until we get some kind of announcement.”
The USDJPY (see above chart) reached its lowest level versus the Japanese currency since March 17 trading as low as 77.83, at time of writing this report it was sitting at 77.95.
The AUDUSD continues to advance to its post float highs of 1.1011 set on the 3rd of May trading up from yesterday lows of 1.0822. Traders will be concentrating on the Australian CPI out at 11h30.
Gold rose for the third straight session to settle at 1619.30 per ounce as the prolonged US debt stalemate boost demand for the precious metal as a haven.
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Source Bloomberg, Dow Jones News