Yesterday found the AUD almost one percent weaker across most of the majors.
The reason behind the movement was the immensely missed target of Australian Unemployment. Analysts were expecting a figure of six percent, stable from previous month’s release.. The actual figure released for Unemployment yesterday was a disappointing 6.4%. This number is of major significance as it is the worst unemployment figure in Australia for 12 years. Generally there is a variance of plus or minus 10 basis points in unemployment numbers, so investors were surprised at the 40 basis point move in the wrong direction, and the AUD was punished accordingly.
Today we have the Monetary Policy Statement out of Australia. The release provides important insight into the Reserve Bank’s view of economic conditions and inflation, also the key factors that will shape the expectations of monetary policy and influence their interest rate decisions. A closely watched subject will definitely be inflation as the current inflation rate is currently sitting on the upper bounds of the Reserve Bank of Australia’s target rates; at three percent.
Moving forward, investors are expecting a slightly weaker Trade Balance figure from China. However, China being China, we may see some unexpected figures during the day. Generally China will release the figure midday so keep a careful eye on the important release.
Tonight we will have the UK release their Trade balance figures. This is expected to be a positive number in line with recent economic figures from the UK. We may see a slight rally tonight of the GBP/AUD heading in to the weekend as this is released.