The Australian dollar is holding above the US82.00 cents mark today as disappointing data out of the US and a shock move by the Swiss central bank provides some support to the currency.
At 8.45pm (AEDT) the Australian dollar was trading at US82.19 virtually unchanged from yesterday’s price of US81.20 cents.
Jobless claims in the US jumped by 19,000 to 316,000 a Labor Department report showed, their highest level in 4 months and against analysts’ expectations of 291,000.
The numbers may be a little bit distorted, as there is usually a high number of temporary workers dismissed at the start of the New Year after the busy period in the run up to Christmas and some analysts expect the employment market to continue on from its solid performance in 2014
"We attribute the spike to the seasonal adjustment process," said Jesse Hurwitz, economist at Barclays Bank. "We expect initial and continuing claims to resume their downward trend in the coming weeks and reflect broader improvement in labor markets."
The Swiss central bank yesterday decided to end it peg against major currencies, which saw the Swiss Franc rally up to 30% against the Euro before finishing the day around 15% higher.
One of the beneficiaries of this surprise move could be the Australian dollar as Investors bail out of the Euro and seek higher yielding currencies like the Aussie.
CBA chief currency strategist Richard Grace noted,
"You've got some participants shuffling out of euros for fear of capital erosion on their reserves and holdings. They're looking for higher yielding currency assets and that includes the Australian dollar,"
"Going forward, the absence of this large buyer of euros in the market means the Aussie should trade a little bit higher against the euro. You then come back to the fundamentals without this [partial] distortion occurring"
Recommended Content
Editors’ Picks
EUR/USD flirts with 1.0700 post-US PMIs
EUR/USD maintains its daily gains and climbs to fresh highs near the 1.0700 mark against the backdrop of the resumption of the selling pressure in the Greenback, in the wake of weaker-than-expected flash US PMIs for the month of April.
GBP/USD surpasses 1.2400 on further Dollar selling
Persistent bearish tone in the US Dollar lends support to the broad risk complex and bolsters the recovery in GBP/USD, which manages well to rise to fresh highs north of 1.2400 the figure post-US PMIs.
Gold trims losses on disappointing US PMIs
Gold (XAU/USD) reclaims part of the ground lost and pares initial losses on the back of further weakness in the Greenback following disheartening US PMIs prints.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
Germany’s economic come back
Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.