AUD falls on the back of stronger USD

OzForex Research OzForex Foreign Exchange

AUD - Australian Dollar

The Aussie fell over the weekend on the back of a stronger than expected US non-farm payrolls report released just after Friday midnight. The figure came in much higher than its forecasted rate of 181k, at 266k pushing the unemployment rate down to 3.5%.

In the future, we can expect to see some movement during RBA Governor Lowe’s speech on Tuesday morning. As head of the central bank, his public engagements are scrutinised by traders as they are often used to drop subtle clues regarding future monetary policy.

In terms of technical levels, the Aussie continues to trade within the 0.6760 and 0.6860 range to open at 0.6836 against the USD this morning.

Key Movers

Adopting a broader scope, we saw upbeat global risk sentiment on the back of the stronger than expected US employment data. The non-farm pay roll data documented payroll growth of 266K for the month of November, dwarfing the market consensus of a 180K rise. This was the key driver of markets on Friday and allowed the USD index to rise 0.3% with the S&P500 and bond yields also ticking higher.

In contrast to the USA, a surprise rise in the unemployment rate in the Canadian economy rendered the CAD the worst performer on the day. It fell 0.6% against the greenback with the EUR also falling from 1.1110 to 1.1040. The pound was only slightly lower after its week of gains as markets look to position themselves ahead of this weeks general election in the UK.

Expected Ranges

AUD/CAD: 0.8950 - 0.9135 ▲

AUD/EUR: 0.6115 - 0.6255 ▲

GBP/AUD: 1.8940 - 1.9595 ▲

AUD/NZD: 1.0330 - 1.0510 ▼

AUD/USD: 0.6740 - 0.6920 ▲

Author

OzForex Research

OzForex Foreign Exchange

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The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

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