Australian Dollar Outlook - Jan. 14, 2016

By @chelean on
Australian dollar coin
A one Australian dollar coin is seen in this picture illustration taken in Sydney, Australia, July 29, 2015. Reuters/David Gray

Bell FX Currency Outlook: The Australian Dollar has given back yesterday’s gains, range trading while it tries to digest 2016’s volatility.   

Australia: The AUD tried to rally after the China RMB fix stabilised and trade data, which showed a surprising improvement. The AUD remained well within recent ranges and ended the session close to its low after US stocks failed to rally. Today local employment data will be key for the AUD; a strong read is likely to drive the AUD higher, whilst a poor reading will pressure the AUD further.  Employment growth has been remarkably strong recently, increasing by a cumulative 130k over October and November. The unemployment rate declined to 5.8%, down from the peak of 6.4%. Labour market conditions have certainly improved but measured jobs growth in November, and to a lesser extent October, was boosted by the rotation of the labour force survey sample.   

Majors: The Fed’s Beige Book released an hour ago shows the majority of Fed districts describing their economy as enjoying ‘moderate’ growth, with still-subdued wages a fairly common feature across all districts.  Riskrallies provoked by a combination of yesterday’s fourth successive steady PBoC CNY fix and better than expected China December trade data, the turnaround from early New York trade is blamed entirely on latest EIA oil inventory data. This shows crude oil inventories rising by a higher than expected 234k barrels last week and supplies at Cushing, Oklahoma (the delivery point for WTI crude) climbing to an all-time high of 64 million barrels. Though the EIA also has US fuel demand falling 2.5% last week, we’d note that Chinese crude petroleum imports jumped to a record 33.2mn barrels in December, 9% up on a year ago.    

Economic Calendar 14 JAN

  • AU Unemployment/Employment Change Dec
  • JN Machine Tool Orders Dec
  • UK BoE Interest Rate Decision Jan
  • US Initial Jobless Claims Jan-09



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