The Australian Dollar was sitting firmer on Friday after hitting a 6 year low of 0.75694 US Dollars during its offshore session on Wednesday, its lowest point since March 2009.
The Australian dollar experienced some recovery on Thursday after the Australian Bureau of Statistics (ABS) released its unemployment data for February. This figure showed a drop in unemployment during February of 0.1% to 6.3% with an additional 15,600 jobs created. This was despite economists predicting a stagnant job market; and subsequently helped the Australian Dollar (AUD/USD) climb back over 76 US cents.
The Australian Dollar’s recovery was tempered by talk that a stronger jobs market will not be enough to avert further cuts to interest rates by the Reserve Bank of Australia (RBA), with many economists predicting the potential for a further two rate cuts in 2015.
The Australian Dollar further rallied during the early hours of Friday morning after US Retail Sales were released. The data showed that Retail Sales in February came in lower than expected marking the third consecutive month of decline. Recent weather events played a part in the decline; with freezing temperatures and snowstorms being blamed for the poor February result.
The Australian Dollar (AUD) comes out of the weekend softer against Majors.
The Australian Dollar (AUD) declined during offshore trade as the US dollar rose against the Euro; this result was despite the University of Michigan’s preliminary reading for March showing a decline in consumer confidence. Considered one of the foremost indicators of US consumer sentiment, the result came in under the forecast of 95.7 at 91.2. A low or falling value is considered an early indicator of economic downturn.
Under normal circumstances, poor US economic data would negatively impact the US Dollar (USD) but the US Dollar rose as the first week of the European Central Bank’s (ECB) 1.1 trillion Euros bond buying program hurt the Euro. Westpac senior market strategist Imre Speizer was quoted as saying ‘It’s a lot of money printing; markets are still pricing that in’.
The US dollar (USD) may experience some fluctuation on Thursday morning as the US Federal Reserve (FOMC) holds its policy meeting and announces its rate decision. Any movement could come off the back of the accompanying statement removing the word ‘patience’ in regards to the timing of a possible US interest rate rise, without giving specifics on when the next increase could occur. Rates are forecast to remain steady at 0.25%.
At 0700 AEDT on Monday, the Australian Dollar to US Dollar (AUD/USD) exchange rate was trading at 0.7621 US Dollars, down from 0.77675 US Dollars on Friday.