Wednesday was a rather quiet day for the AUD, with minimal movements of approx. 0.10-0.25% against a basket of currencies; the only real data release of note was from China.
China’s CPI figures rose 1.5% in November from the same period last year, just slightly above the Reuters poll forecast of 1.4%. The major driver for the increase was the cost of food in China, with Food CPI up 2.3% year on year.
It was more positive than Tuesday’s news where China’s Trade Balance fell short and magnified concerns that China whilst in the middle of a huge slowdown has lost its appetite for importing bulk commodities.
The Australian dollar barely moved throughout the day against the USD exchange rate trading between 0.7228 & 0.7237. Overnight sawn a little more movement, dropping as low as 0.7169 before moving back into the 72’s this morning.
The AUD/USD exchange rate is trading this morning at 0.7231 at 09:00 AEST.
Today sees a more exciting line up of releases, the day started with the RBNZ cutting the official cash rate from 2.75% to 2.5% which has was expected to send the AUD/NZD exchange rate on a huge upward movement from $1.09, however the market has taken it a different way, and the exchange rate has dropped into the $1.07’s. We may see further movement this afternoon when the UK, US & EUR sessions open and digest both the information and the speech from Governor Wheeler who said that further cuts are a possibility if it is felt that they are necessary. He will speak again later this morning and we should expect to hear some more about today’s decision and the NZD moving forward.
The AUD/NZD exchange rate is trading at $1.0747 at 09:00am AEST.
The Australian Unemployment rate is due out at 11:30am AEST this morning, and is forecast to increase from last month’s surprise 5.9% to 6% again today.
This evening, attention turns to the GBP, with the BoE meeting about their interest rates. After some recent comments from Mark Carney that they may not look at raising rates until late 2016, there is not expected to be much to report on. This could be another Central bank waiting to see what happens with the Federal Reserve decisions next week, depending on what happens and what gets said then, the rest of the banks look to review their current policy.
The GBP/AUD exchange rate has seen plenty of movement in the past week after the AUD’s recent strength (trading at $2.03 one week ago) has started to slowly fall away off the back of continuing plunging Iron Ore & Copper prices, and yesterday’s breaking news about the outlook of the commodity industries in general, with one of the world’s largest mining companies slashing 85,000 jobs, leaving a very bleak outlook for 2016.
The GBP/AUD is trading at $2.0987 at 09:00am AEST.