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Shifting the focus to the commodities market, Gold is capturing attention as it nudges close to a near-term resistance at 1930.56, following successful defense of 1900 level last week. Decisive breakthrough at this juncture could signal completion of the pullback from 1952.82, further suggesting resumption of its upward march started from 1884.83.
New Zealand's BusinessNZ Performance of Services Index reported another slump in August, marking the third consecutive month of declining in the services sector. This downturn saw PSI slip from 48.0 in July to 47.1 in August, notably falling short of long-term average of 53.5.
As we look forward to the upcoming Asian session, all eyes are on Australian Dollar, gearing up to be the focal point. This heightened attention comes as RBA plans to publish the minutes of its meeting held on September 5. Remarkably, the meeting marked the third consecutive time RBA chose to maintain the status quo on interest rate.
The services sector has contracted for the second month in a row as the level of new orders fell to its lowest point since August 2021, when the country was last in lockdown.
New Zealand's service sector, as gauged by the BusinessNZ Performance of Services Index, experienced a marked decline in July, descending from 49.6 to a worrying 47.8. This latest reading is not only the lowest since January 2022 but also trails the long-term average of 53.5 significantly.
Australian and New Zealand Dollars faced broad-based pressures in today's Asian session, as markets are gripped by risk-off mood. Hong Kong HSI is witnessing the most significant downturn, in the wake of the beleaguered Chinese property developer, Country Garden, halting trading on at least ten of its mainland bonds. This move has ignited broader decline in property-related stocks. Kiwi faces added burdens, stemming from lackluster services data signaling an intensified contraction in activity. Meanwhile, both Yen and Dollar have risen amid heightened risk aversion, though the former appears to be marginally in the lead. European majors present a mixed picture at the moment.
Dollar surges broadly today, breaking through near term support against Euro, 145 handle against Yen, as well as near high of the year against Chinese Yuan. Worries over China's property, as well as finance sector are weighing heavily down on sentiment. But Swiss Franc and Yen are not benefiting much from risk aversion as in early US session. Indeed, European majors are trading as the worst performers for now, while commodity currencies are trying to recover. That's a development that warrants more monitoring.