Australian dollar rallies on Fed President comments

OzForex Research OzForex Foreign Exchange

AUD - Australian Dollar

The Australian dollar opens higher this morning on the back of comments from the New York Federal Reserve President John Williams saying overnight that the Fed should keep rates lower for longer. The AUD/USD pair has moved from lows of 0.7006 during Asian trade touching a high of 0.7076 just before the New York close.

Yesterday saw the release of Australian employment figures where employment gained just by 500 workers for the month of June as the 21.1k gain in full-time employment more than offset the 20.6k fall in part-time employment. The numbers are the weakest seen in 11 months. The unemployment rate remained steadied at 5.2% however softer job growth may continue and there is a risk that the unemployment rate will rise over the coming months. The RBA Governor has said recently that the unemployment rate could and should be lower with a rate of 4.5% in mind.

Key Movers

The US dollar Index which measures the strength of the Greenback against a basket of six major currencies has dropped 0.6% touching 96.68 following comments from the New York Federal Reserve President John Williams, he said “take swift action when faced with adverse economic conditions” and “keep interest rates lower for longer” when you do lower rates. The Fed is widely expected to lower rates at the end of the month because even though the economy is doing pretty well, risks are rising from general business uncertainty and trade policy worries.

The Sterling rose against the Greenback after an unexpected rise in Retail Sales, volume of sales grew by 1% in June compared with the previous month, the data was strong enough to push the GBP/USD towards to 1.25 mark. The rise was mainly due to non-food stores increasing sales in the home-improvements sectors and second-hand goods. Despite this, the Pound is set to weaken further as Brexit and politics overshadow economic fundamentals.

Expected Ranges

AUD/USD: 0.6980 - 0.7100 ▲

GBP/AUD: 1.7640 - 1.7960 ▼

AUD/NZD: 1.0380 - 1.0470 ▲

AUD/EUR: 0.6230 - 0.6300 ▲

AUD/CAD: 0.9150 - 0.9250 ▲

Author

OzForex Research

OzForex Foreign Exchange

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