The Aussie has been looking vulnerable since Governor Stevens, Head of the Reserve Bank of Australia indicated last week that the Australia Dollar is currently over-valued. Although the AUD experienced a minor recovery earlier in the week, it is still struggling to find its feet against the downward pressure.
The annualised Chinese inflation figure was released yesterday. They targeted a relatively healthy 2.4% from their previous 2.5% figure and the result was a near miss, falling short at 2.3%. Further Chinese data will be announced today in the form bank balance sheets and trade balance figures. The focus on the domestic front today will be on the Australian Unemployment Rate and Employment Change. Although the economic forecast is that Australia will add twelve thousand jobs to the economy, the Unemployment Rate is expected to increase from 5.8% to 5.9%. A negative change to employment and a figure of 6% or higher will certainly damage the strength of the Aussie and an unchanged figure of 5.8% or lower is likely to provide support to the AUD. These economic indicators will be very influential to the AUD today in what is certain to be a very volatile trading day.
Tonight the Bank of England rate decision will be announced. Although the cash rate is expected to remain on hold at 0.5%, we can expect the accompanying notes to indicate how close the BoE are to raising interest rates. Any indication that the governing body is getting closer to increasing interest rates will bring further strength to the Pound.
The economic events out today and tonight seem to favour the continued downward pressure on the Australian Dollar to create a ‘correction’ on its value. Today’s Australian employment data and tonight’s UK data will be watched closely to see if the Aussie is able to find its footing and hold its’ current value or whether it will fall subject to the recent falling trend