dollars
A U.S. dollar note (bottom) is pictured alongside other currencies including (L-R) the Australian Dollar, Singapore Dollar, Korean Won and China's Yuan in this picture illustration taken in Washington, October 14, 2010. Reuters/Jason Reed

Bell FX Currency Outlook: The Australian Dollar fell back on Friday night to below .7100 as the most recent US non-farm payroll figures saw the USD move higher as future rate rises in the US were back on the agenda.

Australia: Although only 151K new jobs were created in the US last month versus expectations of growth of 190k, the USD appreciated strongly due to a lower unemployment rate, higher wage growth and better participation rate than predicted. Although most analysts are divided whether there will be two or four interest rate rises in the year of 2016, equity markets were all weaker as they reacted to the better than expected data and the prospect of rate rises are definitely back on the agenda. The AUD which had traded into the mid .7200’s on Thursday evening fell back with a thud. The release of the RBA’s Quarterly Statement on Monetary Policy on Friday morning contained no new surprises with the RBA predicting GDP growth of 2.5% to 3.5% for the end of December, 2016 with underlying and CPI inflation tipped to remain in the 2% to 3% bracket. This week will be focused on the USD since data from China will be nonexistent due to the New Year lunar holiday. Later this morning we will see the latest ANZ job ad figures.

Majors: The US unemployment rate on Friday fell to below 5% for the first time since the GFC hitting 4.9% while average weekly wages rose more than expected to be up by 0.5% mom which was more than the flat
result expected. Yoy figures for wages were up by 2.5% which was 0.3% higher than predicted. The participation rate rose by 0.1% to 62.7%. These figures point to a more confident US consumer who is seeing
higher wage growth and rising employment opportunites which may transfer into higher growth of GDP in the first quarter of 2016. The Q1 estimate of GDP by the Atlanta Federal Reserve district has been raised
from 1.2% to 2.2%. Fed Chairwoman Janet Yellen will be testifying before Congress for her semiannual address on Thursday and Friday and her comments wil be closely analysed. On Friday, the latest factory order figures for December from Germany were disappointing falling 0.7% mom but foreign orders expanded by 0.6% mom but were not enough to offset a fall of 2.5% in domestic orders. Overall the figures may point to an improving European economy.

Economic Calendar 08 FEB

  • AU ANZ Job Advertisments Jan
  • US Labor Market Condtions Index Change Jan
  • CH Lunar New Year Holiday

Bell Fx

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