Sell-off hits Wall St and Aussie dollar

Sellers have taken over US stock markets as an expanded trade deficit offered a fresh sign of weakness in US growth.
Global investors also took the stick to the Aussie dollar.
Volatility continued to reign on Wall Street: after an early rise the main indices sank to one-per cent losses before partially recovering in the final hours of Tuesday.
The Dow Jones Industrial Average finished down 76.49 points (0.50 per cent) at 15,177.54.
The broad-based S&P 500 lost 9.04 (0.55 per cent) at 1,631.38, while the tech-rich Nasdaq Composite fell 20.11 (0.58 per cent) to 3,445.26.
Speeches by several officials of the Federal Reserve kept speculation alive over the timing for the central bank to begin slowing its quantitative-easing bond purchases, though most stressed the need for a clearer trend in the data for US growth.
The trade figures for April released on Tuesday suggested some continuing weakness: the deficit widened $US3.2 billion ($A3.29 billion) from March to $US40.3 billion on a rise in consumer imports and despite a fall in the bill for imported oil.
“Foreign trade will not provide much of a boost to real GDP growth in 2013,” said Gregory Daco of IHS Global Insight.
“Indeed, subdued global growth should keep exports in check while modest domestic activity limits the pull for imports.”
On the currency markets the Australian dollar is almost half a US cent lower after global investors reacted to Tuesday’s Reserve Bank interest rate decision.
Early this morning the currency was trading at 96.50 US cents, down from 96.93 cents on Tuesday.
The RBA on Tuesday kept the cash rate on hold at 2.75 per cent.
But BK Asset management managing director Kathy Lien said the tone of the statement accompanying the RBA board’s decision prompted investors to sell off the Australian dollar.
She said the RBA again indicated it had room to cut the cash rate further, if necessary, but also appeared to play down signs of improvement in the Australian and Chinese economies.
The key driver for the Australian dollar on Wednesday would be the release of official gross domestic product (GDP) figures for the March quarter at 1130 AEST.
But, Lien said, investor sentiment was so weak the currency could fall even if the GDP number is better than expected.
“I think investors are being swayed by the reservations of the RBA,” she said.
“So, even if we get a GDP number that is a little higher than expected I still think we could see the Aussie sell off.”