Australian Dollar Outlook - 08 September 2014

Bell FX Currency Outlook: The Australian Dollar touched .9400 on Friday night after the US non-farm payroll data for August came in well below expectations.
Australia: With only 142K jobs created last month in the US versus the 230k expected, the AUD initially spiked and touched the .9400 level as analysts expected that the first interest rate moves to higher levels by the US Federal Reserve might be delayed due to the poorer than expected
jobs figure. This expectation did not last long and the AUD fell back to the mid to high .9300's pretty quickly.

Most of the market interpreted this disappointing figure to more of a one-off event not dissimilar to last month's local employment figure that saw our unemployment figure jump from 6.0% to 6.4%. The three month average of employment growth in the US fell from 245k to 207k. Today we will see the latest in ANZ job ads data as well as trade balance figures from China for July. Tomorrow we see the latest NAB business survey and July's housing finance numbers.

Our latest labour data is out on Thursday and most analysts believe that our recent unemployment figures from last month may have been an anomaly similar to what we saw over the weekend from the US. The iron ore price touched a new 5 year low at USD83.60 per ton on Friday.

Majors: In the US, although the jobs data was poorer than expected the unemployment rate fell to 6.1% from 6.2% while the participation rate fell
slightly to 62.8% from 62.9%. This August jobs figure is looked at as a one-off event in a recent string of better figures and most analysts expect
it to be revised upward in coming months. Interestingly, with a weaker jobs figure and the expectation that the Federal Reserve might be delaying a rate rise, most share market indices finished higher.

Overall, most analysts still expect the first rate rise to occur in mid-2015. In Scotland, the first poll indicated that the move for Scottish independence was favored by 51% which is the first time such a result has been seen before the official vote which occurs on September 18. This will have some
negative implication for the GBP which was weaker over the weekend.

On Thursday, the Reserve Bank of New Zealand meets and is expected to move toward a more neutral position rather than the hawkish approach
they have had recently moving their interest rates higher.
Economic Calendar
8 SEPT CH Trade Balance
AU ANZ Job Advertisements MoM
NZ Manufacturing Sales Volumes QoQ
US Consumer Credit

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