The Australian dollar extends its downside movements against the U.S. dollar, the pair reached the lowest level in about five months at 0.9930, after the Australian economy reported that business conditions index dropped to -1 in July from 2.
Moreover, Aussie continues the bearishness as the stock markets slumped the most in three years on concerns that the loss of the US long-term credit may worsen on the global economic outlook amid dire growth expectations.
As for the negative outlook intensified after the Standard & Poor’s agency downgraded the US’s credit rating from AAA to AA+ along the sluggish US economy; at the meantime the global economy faces also the European debt crisis with the pressure spreading to Italy and Spain which might indeed worsen the outlook.
On the other hand, the Australian dollar dropped after the China’s consumer prices rose by more than economists forecast, stoking concern the government will take more measures to cool growth.
On Wednesday, the AUD Westpac consumer confidence index S.A. for August is due at 01:30 GMT, where the prior reading dropped 8.3% during July, while the economy also will release its retail sales ex. Inflation for the second quarter at 01:30 GMT.
At 14:00 GMT, the U.S. economy will release the wholesale inventories for June, where the previous reading was 1.8% and expected to retreat to 1.0%. The monthly budget statement for July will be released at 18:00 GMT, where the previous reading showed a deficit of $43.1 billion and expected to widen to a deficit of $140.0 billion.