Aussie Share Market Set for Positive Start, Australian Dollar Dips

The Australian sharemarket is poised to open the week positively, following a strong lead from Wall Street. Investors capitalized on the dip in US stocks after a five-day decline that wiped over a trillion dollars off share prices. The Nasdaq 100 surged 1.7 percent while the S&P 500 rose 1.3 percent on Friday. These gains mitigated the week's selloff, which began with a December rout extending into the first trading day of the year.

Traders disregarded concerns about slowing earnings growth for tech stocks, including the so-called 'Magnificent Seven,' and continued to acquire shares of AI leader Nvidia. The ASX 200 index is expected to benefit from Wall Street's positive start. Futures indicate a 0.3 percent jump to 8264 points on Monday. The Australian dollar, currently at 62.09¢, remains a focal point for the local market. The currency experienced its steepest decline in six years in 2024, and its downward trajectory is anticipated to continue, potentially falling below 60¢ in the coming months. The Aussie has been pressured since September by worsening global risk sentiment and growing expectations that the Reserve Bank of Australia will be forced to lower interest rates. Adding to the negative outlook is the looming possibility of a trade war between the US and China, Australia's largest trading partner. Gareth Berry, a foreign-exchange and rates strategist at Macquarie Bank in Singapore, stated, 'A slide all the way to 60¢ is conceivable in the risk case where US equities take fright at an unfolding global trade war, China's fiscal counter-stimulus is inadequate, and the RBA is forced to cut quickly to lend support.' The Australian dollar plunged 9.2 percent last year, reaching a low of 61.79¢ on December 31 before marginally recovering to end last week at 62.16¢

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