Global Themes

Aussie drops from three-week highs as oil turns

The AUDUSD slipped from three-week highs overnight after new OPEC production cuts disappointed markets and the oil price plunged.

The Organisation of Petroleum Exporting Countries agreed to extend cuts of 1.8 million barrels per day to March 2018 but markets had hoped for larger or longer cuts.

Oil fell 4.6% in its biggest one-day loss in two months.

Dragged lower

The Aussie was dragged lower with other commodity currencies.

The AUDUSD fell 0.7%.

The Aussie was weaker versus the euro and British pound with the AUDEUR back at eight-month lows. A break below these levels could set up further losses.

The AUD also lost ground versus the New Zealand dollar as it traded to new three-month lows.

US GDP

The key events tonight come from the US.

US GDP will be closely watched after early reports found a weaker than expected number. The market is looking for an annual growth rate of 0.9%.

Also, durable goods orders, also released at 10.30pm (AEST), will provide a more up-to-date reading on the US economy.

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