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 opens this week’s trading firmly above the .7600 mark as US payroll figures and other economic data indicate the US economy is in relatively good shape.

Australia: The AUD continued to hold its value as data from the US was slightly better than expected and the latest PMI data from Europe and the UK were also slightly better than expected. On Friday the latest PMI readings from China were better than predicted with the official manufacturing PMI figures for March coming in at 50.2 which is up from 49.0 in the prior month. The Caixin manufacturing PMI figures also rose to 49.7 from 48.0 and the official services PMI figures rose to 53.8 in March. We expect the AUD will trade in a tight range today before the RBA’s rate announcement tomorrow afternoon where all analysts expect no change to our 2% cash rate. As always the RBA statement will be closely analysed for any indication to a change in their easing bias. Today we will see the latest job ad figures from ANZ, March retail sales figures and building approvals for February.

Majors: The USD had a brief rally on Friday after the non-farm payroll figures for March revealed an increase of 215k jobs versus consensus estimates of a rise of 205k. The unemployment rate ticked up 0.1% to 6% although the participation moved up slightly to 63%. Average hourly earinings rose 0.3% mom which was slightly higher than the rise of 0.2% expected. Other US data released on Friday continues to point to the likelihood of a rise in interest rates in the US in June with the manufacturing numbers for March of 51.5 in line with expectations while the ISM manufacturing figures of 51.8 were better than the expected result of 51.0. ISM prices paid in March were higher at 51.5 versus 49.0 expected and last month’s figures of 38.5. New ISM orders were 58.3 which were much higher than last month’s figure of 51.5. Construction spending was higher by only 0.5% in February which was higher than expected but not as good as January’s figure of a 2.1% increase. The consumer sentiment survey from the University of Michigan rose to 91 from last month’s reading of 90. The UK manufacturing PMI was slightly lower than expected at 51.0 but better than February’s figure of 50.8. In March UK house prices rose 5.7% yoy which was higher than 5.1% figure expected and February’s increase of 4.8% yoy. The June 23 referendum on EU membership and the possibility of a rate cut in the UK continues to weign upon the GBP.

Economic Calendar 04 APR

  • AU Retail Sales MoM Feb
  • AU ANZ Job Ads MoM Mar
  • AU Building Approvals MoM/YoY Feb
  • AU Melbourne Institute CPI gauge MoM/YoY Mar

Bell Fx

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