Australian Dollar
At the close of last week the Australian Dollar softened across the board as the odds of US borrowing costs being raised in March rose following the publication of the latest US jobs data.
Although the US economy failed to register the level of employment growth anticipated by economists, the decrease in the nation’s unemployment rate and increase in average earnings was enough to give USD a boost and send higher-risk currencies like the ‘Aussie’ lower.
However, as a new week of trading got underway the Australian Dollar advanced on both the Pound and Euro. Gains against the US Dollar were limited though and the pairing remains trending in the 0.70 level.
The only domestic data with the potential to spark ‘Aussie’ movement today is the NAB Business Confidence survey. The gauge printed at 3 previously and any improvement on this figure could lend the Australian Dollar support.
With Chinese markets closed for the Lunar New Year, market movement may be comparatively limited but news from Australia and the US is still liable to prompt fluctuations.
Sterling
After a fairly dismal week of trading for the Pound, largely due to ‘Brexit’ concerns and dovish sentiment from the Bank of England (BoE), Sterling rallied against the commodity currencies before the weekend.
The British currency registered a 250 pip gain against the ‘Aussie’ as investors ditched higher-risk assets in the wake of the US employment data. These gains were not set to last though and a widening divergence in the opinion polls regarding whether Briton’s will vote to stay in the EU or leave left Sterling broadly softer on Monday.
While this week’s economic calendar is looking decidedly sparser than last week’s, some AUD/GBP movement could occur tomorrow as the UK publishes its trade balance numbers for December.
Euro
The Australian Dollar consolidated gains against the Euro during Monday’s European session as the only ecostat for the currency bloc disappointed. The Eurozone’s Sentix Investor Confidence index dropped from 9.6 to 6.0, a much weaker result than the 7.4 figure forecast. European stocks were also down for a sixth day as the global economy provided cause for concern.
In the hours ahead Germany’s trade balance and industrial production numbers could prompt some EUR exchange rate fluctuations. German industrial output is believed to have fallen by -0.6% on the year in December – a potentially Euro negative result.
US Dollar
After rallying beyond the 0.72 level following a spate of worse-than-forecast US reports, the AUD/USD exchange rate plummeted on Friday.
The ‘Aussie’ slid back to 0.70 against the ‘Greenback’ as the US Dollar broadly strengthened amid bets that the Federal Reserve will use the surprising decline in the US jobless rate to justify increasing borrowing costs in March.
High profile US data is in short supply for much of the week, with the next report being Wednesday’s Wholesale Inventories figure for December. Should upcoming US figures make a March rate adjustment from the Fed more likely, the AUD/USD exchange rate could edge back below 0.70.
Canadian Dollar
Friday’s Canadian employment data revealed a surprising increase in the nation’s unemployment rate, but commodity price movements limited the report’s impact on the Canadian Dollar.
However, the AUD/CAD exchange rate firmed on Monday as crude oil prices dipped as a result of supply concerns. A Saudi-Venezuela meeting also left investors feeling pessimistic about steps being taken to boost prices.
With Canadian data in short supply until Friday, commodity shifts will be the main cause of CAD volatility.
New Zealand Dollar
Like the Australian Dollar, the New Zealand Dollar tumbled on Friday as risk-appetite waned.
While the ‘Kiwi’ has since firmed against the Pound and Euro, the South Pacific currency dipped against both the US Dollar and Australian Dollar (with AUD/NZD achieving a high of 1.0718) during European trading.
Investors with an interest in the AUD/NZD exchange rate will now be looking ahead to Wednesday and the release of New Zealand’s Card Spending and housing data.
Data Released
Feb 9th 11:30 AUS NAB Business Confidence (JAN)
Feb 9th 18:00 EUR German Industrial Production (YoY) (DEC) -0.6%
Feb 9th 20:30 UK Total Trade Balance (Pounds) (DEC) -£3000
Feb 10th 10:30 AUS Westpac Consumer Confidence