Daily currency update
The Australian dollar is slightly weaker this morning when valued against the Greenback. The Aussie dollar collapsed after US economic data on Friday showed that the labor market remained tight, and it would keep the US Federal Reserve under pressure to bring down inflation to the 2% target. At the time of writing, the AUD/USD exchanges hands at around 0.69 US cents. Last week Business confidence fell considerably in Q4 as concerns about global and domestic economic growth mounted. Still, business conditions remained strong, albeit easing from the highs seen in Q3. The easing in conditions was evident across industries and states, but all remained in positive territory. Looking ahead this week and today the Australian Bureau of Statistics will release monthly retail sales figures which is the primary gauge of consumer spending, which accounts for the majority of overall economic activity. On Tuesday all eyes will be on the Reserve Bank of Australia (RBA) official cash rate announcement which is expected to lift the interest rates by another 0.25% from 3.10% to 3.35%. Although it’s not a given. The Reserve Bank could use its first meeting of the year to deliver a super-sized 0.4 percentage point lift in official interest rates as the RBA’s aggressive tightening of monetary policy is now starting to bite across the economy.
Key movers
On Friday in the United States US jobs data surprised investors as further Federal reserve action is now expected. The US Department of Labor (DoL) revealed January data that surprised investors, with Nonfarm Payrolls smashing expectations after the economy created 517K jobs in the month, exceeding estimates for the creation of just 185K jobs. Consequently, the Unemployment Rate fell to 3.4% from 3.5%, while December’s figures were revised upward. Average Hourly Earnings, sought by the US Federal Reserve as a measure of wages inflation, linked to last week’s Employment Cost Index (ECI), came in at 0.3% MoM, in line with forecasts but lower than December’s report. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Employment also increased in government, partially reflecting the return of workers from a strike. Last week the Federal Open Market Committee (FOMC) announced a 25 basis point increase in its benchmark rate range to 4.50 – 4.75 percent. The increase was a further step down in pace from the 50 bp increase in December and the 75 bp hike in November. On Wall Street, the Nasdaq 100 and Dow Jones fell -1.59% and -0.38% Friday. Still, the former ended the period in the green. Across the Atlantic Ocean, the FTSE 100 and DAX 40 rose 1.76% and 1.91%, respectively. Things were more pessimistic in Asia, with the Hang Seng Index sinking by 4.53%.
Expected ranges
- AUD/USD: 0.6800 – 0.6900 ▼
- AUD/EUR: 0.6300 – 0.6500 ▼
- GBP/AUD: 1.7300 – 1.7500 ▲
- AUD/NZD: 1.0750 – 1.0650 ▲
- AUD/CAD: 0.9100 – 0.9300 ▲
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 rebounds from multi-week lows, trades above 1.0750

EUR/USD came under heavy bearish pressure and declined to its weakest level in three weeks below 1.0750 on Friday after the stronger-than-expected Nonfarm Payrolls data. Week-end flows, however, helped the pair erase its daily losses.
GBP/USD remains on track to snap three-week winning streak

GBP/USD recovered toward 1.2550 after coming in within a touching distance of 1.2500 in the second half of the day after Nonfarm Payrolls came in at 199,000 for November. Despite the recent rebound, the pair remains on track to snap a three-week winning streak.
Gold retreats below $2,020 as US yields push higher

Gold broke below its daily range and declined toward $2,010 with the immediate reaction to the upbeat US November jobs report. Although XAU/USD managed to recover toward $2,020, rising US Treasury bond yields triggered another leg lower.
Bitcoin price could retrace to $42,000 if US Nonfarm Payroll comes in at 180,000

Bitcoin price just like other assets, is highly impacted by the macro-financial developments. This includes the Nonfarm Payrolls (NFP) report released by the BLS of the United States.
The week ahead – Fed, ECB and Bank of England rate decisions

When the Federal Reserve kept rates unchanged back in November for the second meeting in a row there was still the distinct possibility that the final meeting of 2023 would provide the possibility of one more rate rise to round off the year in line with Fed policymakers dot plot forecasts of 5.6%.