AUD - Australian Dollar
The Australian dollar enjoyed mixed fortunes through trade on Wednesday enjoying a consolidated push above 0.74 through the domestic session before correcting lower overnight following stronger than anticipated US services data and hawkish commentary from key Fed officials. With little of note on the domestic docket, the AUD extended Tuesday’s post-RBA upturn touching intraday highs at 0.7425, finding added support following softer than expected ADP employment data. The ADP employment report often provides a key insight into US labour market conditions ahead of the more comprehensive non-farm payroll print, and the surprise downturn put investors on notice, forcing a correction in US ten-year treasury notes and putting the USD under pressure. The AUD was unable to hold onto gains and fell steeply following a better than anticipated US services report. The ISM services PMI rose to a record high, highlighting supply constraints and labour shortages as key factors impacting input costs and signalling that transitory inflationary pressures are unlikely to ease in the near term. Having fallen back through 0.74 the AUD touched intraday lows at 0.7370 and opens only marginally higher this morning at 0.7377 US cents.
Key Movers
The US dollar advanced against most counterparts on Wednesday, buoyed by a record high ISM services PMI report. Having come under pressure following weaker than expected leading employment data the USD rebounded strongly as the measure of service sector performance printed well beyond expectations. A 7-point gain in business activity and an uptick across demand for new orders and employment helped fuel expectations the US economic recovery remains on track despite the challenges presented by the COVID-19 Delta variant. A deep dive into the monthly print showed shortages in the supply of input goods, labour and extended delivery times which continue to add to the rising costs of service suggesting transitory inflationary pressures will not abate in the near term. The stronger than anticipated print coupled with hawkish commentary from Fed policymaker Richard Clarida helped fuel USD gains through the latter half of the overnight session, propping up the dollar index and driving a 0.2% gain on the day.
Both the euro and pound gave up ground on the day slipping below 1.1850 and 1.39 respectively. Our attentions turn now to tonight’s Bank of England policy meeting. We will be keenly attuned to any significant change in economic forecasting, but anticipate policymakers will refrain from adjusting the current policy setting. All in all the market will likely continue to bounce within the week's well-defined ranges ahead of Friday’s non-farm payroll print.
Expected Ranges
AUD/USD: 0.7320 - 0.7430 ▼
AUD/EUR: 0.5270 - 0.5350 ▼
GBP/AUD: 1.8680 - 1.8930 ▲
AUD/NZD: 1.0430 - 1.0580 ▲
AUD/CAD: 0.9210 - 0.9320 ▼
IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. Oz Forex Foreign Exchange makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites. Please read our Product Disclosure Statement and our Financial Services Guide.
Regulated in Australia by ASIC (AFS Licence number 226 484)
© 2010 Copyright Oz Forex Foreign Exchange Pty Ltd ABN 65 092-375-703
OzForex Foreign Exchange Services
Member of FOS (Financial Ombudsman Service)
Full Member of AFMA (Australian Financial Markets Association)
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.