AUD/USD slips into the red on below-forecast Australian CAPEX data

Aussie has come under pressure, courtesy of an unexpected decline in the second quarter CAPEX.
The forward-looking CAPEX number also missed estimates.
The uptick in CAPEX on plant and machinery may limit downside in the AUD.

The offered tone around the AUD strengthened, pushing the AUD/USD pair to a session low of 0.6725 as Australian private sector business investment fell unexpectedly in the second quarter.

According to the Australian Bureau of Statistics (ABS), private sector capital expenditure (CAPEX) fell 0.5% in three months to June in seasonally adjusted chain volume terms, missing market expectations for an increase of 0.5%.

CAPEX on equipment, plant, and machinery, which is used in GDP calculations, rose by 0.6% in the June quarter 2019 while the seasonally adjusted estimate rose by 2.5%. Also, the third estimate for 2019/20 raw CAPEX came in at $113.40 billion, up 14.9% from the second estimate for 2019/20. Analysts at TD securities were expecting the third estimate to print at A$117 billion.

A weaker-than-expected headline figure and the slight miss on the forward-looking number is hurting the AUD at press time. AUD/USD pair is currently trading at session lows near 0.6725, having hit a high of 0.6744 earlier today.

The downside, however, could be limited by an uptick in the CAPEX on plant and machinery. Also, the AUD may pick up a bid if the USD/CNH pair dives out of a pennant pattern (Yuan appreciates) and global stocks put on a good show. As of writing, the futures on the S&P 500 are reporting at 0.45% drop.

Pivot points

1. R3 0.6785
2. R2 0.6774
3. R1 0.6753
PP 0.6742
1. S1 0.6722
2. S2 0.6711
3. S3 0.669

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