During the Australian trading session yesterday, the Australian Dollar gave back some of the ground it made against the majors Tuesday night. However, most of the movement was made overnight. The AUD increased by over a percent against the Pound due to weak UK data. It also made minor positive movements against the EUR and USD, however it remained steady against the CAD and fell by over half a percent against the NZD.
AUD/GBP
There were a number of economic releases out of the UK last night. The Average Weekly Earnings increased to 1.0% from 0.7%, however the official Unemployment Rate for September was forecast to reduce from 6.0% to 5.9%, yet it remained at 6.0%. Economists expected 125 thousand jobs to be added to the economy, but the printed figure fell short at 112 thousand.
The Bank of England Inflation Report was also announced out the UK overnight. The underlying tone of the report indicated that the BoE expect lower inflation. The employment figures miss out of the UK, combined with the bearish BoE inflation rate allowed the AUD to GBP to move up by over one percent overnight.
The most significant economic release due of Australia today is concerned with Consumer Inflation Expectation for the month of November. The previous months figure was 3.4%, which is actually above the Reserve Bank of Australia’s target inflation range of 2-3%. A high inflation expectation by consumers may cause some strength to the AUD following the announcement at 10am AEST today.
Chinese data associated with Industrial Production and Retail Sales is scheduled to be released this afternoon and could potentially sway the value of the AUD. Both the annualised Industrial Production figure and Retail Sales figures are expected to remain the same at 8.5% and 12.0% respectively. A beat to the forecasted figures is likely to push up the value of the AUD against the majors whilst a miss could see the ‘Aussie’ fall slightly.
AUD/EUR
The major economic releases tomorrow will take place in the evening, with the German Gross Domestic Product figure to be announced prior to the Euro-Zone GDP. The German GDP has been forecast to increase slightly, with the Euro-Zone annualised figure expected to remain at 0.7%. The AUD to EUR exchange rate has been quite range bound since the Australian Dollar fell from a 2014 high in mid September, however it was able to break through the 0.70 mark last night, giving promise for further positive movements later in the week.
AUD/USD
The final high-tier economic releases for the week will occur out the US. Advance Retail Sales for October are expected to result in a printed figure of 0.2% growth from the previous month. The University of Michigan’s Confidence Index will follow on from the Advance Retail Sales. Economists’ are targeting a reading of 87.5, which is a slight increase to the previous months’ consumer sentiment result. The AUD to USD exchange rate has recovered slightly from the 4 year low that was hit last week, however, the ‘Aussie’ still remains vulnerable against the ‘Greenback’.