A lack of domestic economic data released last week is being made up for this week, as we see the release of both heavy and soft data out of Australia. Yesterday we saw Australia fall short on their previous months Performance of Services Index and Building Approval rates. Chinese Manufacturing PMI released yesterday also fell short of the forecasted and previous months’ figure. Despite the Aussie weakening momentarily in response to data, it managed to regain the ground it lost within a matter of hours.
Economic attention today will be focused on two key data releases out of Australia today. The first being the Trade Balance figure which is expected to be a surplus of $1200M again. The second is the RBA’s rate decision which is likely to be held at 2.5% again, especially in light of inflation data out last month falling between the targeted range of 2-3%. Once again, it seems as though the accompanying notes of the rate decision will be the factor that affects the strength of the AUD rather than the actual rate decision this month.
Tomorrow we see the release of Retail Sales figures out of Australia, however, the big currency mover this week is likely to occur on Thursday following the announcement of employment figures. The economic consensus is that the Australian economy will add approx 8750 jobs to the economy and that the Unemployment rate will increase from 5.8% to 5.9%. A negative Employment Change figure resulting in an Unemployment Rate of 6% or higher will certainly impact the AUD adversely. If a higher number of jobs are created and the Unemployment Rate remains the same, it is likely that we will see a late week rally of the Aussie.
The RBA’s Statement on Monetary Policy this Friday will round off the release of local economic data for the week. With a week full of domestic data to be released, it is quite possible that some of the economic forecasted targets will be missed and we will in turn see a selloff of the AUD. With that said, better than expected economic results should see the Aussie Dollar soar. Either way, it seems as though we’re in for a roller coaster ride ahead this week, so strap in.
The RBA’s rate is decision will be announced at 2:30pm AEST today.