Australian Dollar Forecast Nov 6

The AUD has opened slightly higher this morning to be currently trading just under USD0.9100. Better than expected jobless claims data should have seen the AUD rise further, one would have thought, but these gains were limited by commodity prices trending lower during the offshore session.

Jobless claims in the US fell by 20,000 to a seasonally adjusted 512,000, which was below markets expectations of 523,000.

This is the lowest figure that the US has seen in 10 months. This data is watched closely and seen as a gauge as to the pace of layoffs and the indication of employer's willingness to hire new workers, which can indicate how the US economy is recovering.

Locally, the RBA Governor Glenn Stevens addressed a dinner in Melbourne last night and said that "the neutral cash rate is higher than the current level" but was refusing to come out with a specific number as it is "dangerous to put a precise figure on it".

Today we will see the RBA publish its Statement on Monetary Policy, which contains the central banks economic outlook for the year.

Markets are expecting that this document will show a positive outlook from the Reserve Bank on the Australian economy.

We expect a day of range trading for ther AUD but there could be scope for  volatility tonight with the key economic releases in the US.

Majors: As noted above the jobless claims data out of the US beat market expectations, with all eyes now on the US payroll data, which comes out in the US tonight.

Should this data be positive and with the FOMC continuing to keep the US interest rate at 'emergency lows' we could see further movement away from the USD into riskier currencies.

But should the US unemployment figure edge up to 10%, the psychological impact on investors could potentially cause equity markets and higher yielding assets to fall.

US Non-farm productivity was also released overnight and saw the figure surge well above market expectations to be now at a 5-year high of 4.3%.

Last night also saw the Bank of England (BOE) and the European Central Bank (ECB) announce that their interest rates were to remain unchanged.

The central banks announcements and the rise in equity markets in both the US and Europe yesterday saw the USD lose some strength.

The GBP/USD rallied to a two-week high of 1.6637 after the BOE extended  quantitative easing and the EUR/USD also improved to 1.4880 after the ECB took a step in removing its emergency stimulus measures.

Provided by bellfx.com.au