Australian one dollar coins
A handful of Australian one dollar coins is shown in Sydney, February 18, 2004. Reuters/Tim Wimborne

Bell FX Currency Outlook: The Australian Dollar is steadydespite some interesting employment data releasedyesterday.

Australia: The Australian unemployment data managed to confusemarkets with a jump in both the unemployment rate (6.3% vs. 6.1%expected) and also the number of people employed (+38.5k vs. +10kexpected). The result was an immediate spike in the AUD from 0.7350 to0.7395, before just as immediately retracing the move and settling around0.7330. With the exception of the post unemployment chaos it has actuallybeen a quiet 24 hours for the AUD, which has remained within its recentrange. The USD lost some ground overnight and the AUD is back tradingnear yesterday morning’s levels, currently around 0.7343. The focus todayis the RBA’s Statement on Monetary Policy at 11.30am AEDT. Inparticular, there will be a focus on the growth forecasts in light of GovernorStevens’ recent comments that potential growth could now be lower. Alsoof note for the NZD is that Fonterra is expected to release its 2015/16 milkprice forecast update after its board meeting today. Current conditionssuggest well below the current $5.25 figure.

Majors: The big news overnight came out of the UK as The Bank ofEngland’s ‘Super Thursday’ surprised markets, with the Bank striking amore dovish-than-expected stance on the outlook for the economy andinterest rates. Members voted 8-1 to keep rates on hold (expectationswere that two members would dissent). The GBP slumped in response.Minutes from the meeting show that some policy makers thought it mightbe too soon to raise interest rates, with the pound’s strength offsettingrising inflation as the U.K.’s labour market grows tighter. In the US, initialjobless claims were little changed at 270k (mkt: 272k), up from 267k lastweek. The four-week moving average eased to 268k from 275k. Tonightsee the release of the all-important US non-farm payrolls data.Expectations are for a 225K gain and the unemployment rate to beunchanged at 5.3%. Any signs of rising wage inflation will also be closelywatched as the Fed looks to raise rates in the coming months.

Economic Calendar 07 AUG

  • AU RBA Statement of Monetary Policy
  • US Change in NonFarm Payrolls/Unemployment
  • UK Trade Balance
  • CA Unemployment Rate

[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily