The Australian equity market is set for a weaker open Tuesday morning after US stocks closed down overnight as weak manufacturing data and worries of potential downgrades to the U.S. credit rating overpowered investor relief over the weekend’s debt-ceiling deal.
The Dow (see above chart) dropped 10.75 points to finish at 12132.49 after a volatile session that saw the Dow briefly fall below 12000 for the first time since late June. The index had initially risen as much as 139.18 points immediately after the open, as investors expressed relief at the compromise hammered out late Sunday to raise the U.S. debt ceiling.
The S&P500 index lost 5.34 points close at 1286.94, for its sixth straight decline.
The EURUSD declined from overnight highs of 1.4454 to trade as low as 1.4186 after a last minute deal to avert a downgrade and default on U.S. government obligations boosted the dollar and shifted attention back to the euro zone’s festering debt issues.
The USDJPY has finished a volatile overnight session after initially trading down from highs of above 78.00 to bounce off lows of 76.30 on speculation that Japan is ready to intervene in the foreign exchange market to weaken the currency. At time of writing this report the USDJPY was trading at 77.53.
The AUDUSD has traded down from overnight highs of 1.1067 to a low of 1.0921.
Gold declined from record highs on optimism that congress would pass a compromise curbing the demand for the metal as a safe haven.
|SPI 200 future||4397|
|Dow Jones Indus. Avg||12132|
|FTSE 100 Index||5774|
Source Bloomberg, Dow Jones News