The Australian Dollar (AUD) crumbled yesterday following on from news that Copper had its’ biggest one day intraday drop since October 2011.
The ‘Aussie’ (AUD) had been slowly clawing its’ way back this year, after the lows it was trading at towards the end of 2014. This came to a grinding halt yesterday after it was reported that Copper declined by 6%. This pushed down the value of the commodity based currency by over a full percent against the majors during yesterday’s trading session. Overnight the AUD recovered by approximately half of one percent.
Today the Australian Unemployment Rate will be announced at 10:30 AEST. The forecast is that it will remain at 6.3%, with a mediocre 5,000 jobs being added to economy for the month of December. The AUD will be volatile around this time is set to move in response to the result of this economic indicator. A drop to the Unemployment Rate should give strength to the ‘Aussie’, whilst a rise to 6.4% or more will represent a fresh 12 year unemployment rate high and will therefore likely cause a further decline to the value of AUD.
Australian Dollar to US Dollar (AUD/USD) Exchange Rate Edges Back Towards a New 5 and a Half Year Low
The AUD/USD exchange rate is threatening to push below the 0.80 US cent mark after copper pricing drove down the value of the ‘Aussie’ (AUD) yesterday.
Overnight the US economy released their Advance Retail Sales figure for the month of December. The forecast was for a minor decline to this sector, with the projected figure being -0.1%. The result was worse than expected at -0.9%, allowing the AUD/USD exchange rate to bounce back overnight after falling heavily during the Australian day trading session yesterday.
This evening US employment will be reported on in the form on Continuing Claims and Initial Jobless Claims. Minimal change is expected to the previous month’s figures of 2452K and 290K respectively.
We may see some late week volatility to the AUD/USD exchange rate Friday evening when the US inflation rate is announced. The annualised CPI figure is expected to fall 1.3% to 0.7%, however this expected drop potentially provides the US economy with the opportunity to exceed expectation and drive the AUD/USD exchange rate below the 0.80 US cent floor.
The University of Michigan Confidence release following on from the inflation rate Friday evening is forecast to show increasing consumer sentiment. This may continue the recent trend of the AUD/USD exchange rate falling.