The Aussie dollar launched higher overnight on the back of a surge in iron ore prices to the highest levels since mid-September. Helping the Aussie dollars cause further was generally bullish markets for both equities and commodities more or less across the board. The Aussie dollar to this day remains a risk asset and when optimism is sky high the AUD tends to perform well and when we have destabilising macro events we tend to see a sell-off in the AUD.
RBA monetary policy minutes yesterday didn’t really tell us anything new nor did speeches from RBA Ass. Gov Bullock and Gov Lowe with the latter merely again discussing things like what is a new normal for our economy and the fact that while employment growth has increased, consumption growth forecasts remain weak. I.e. potentially lower interest rates for longer.
Ahead today is the MI Leading Index and Construction Work Done data, the MI Leading Index is a composite of 9 economic indicators and generally speaking a positive number is seen as good for the economy and good for the Aussie – the index has been more or less flat or negative since late 2013. Construction Work Done is another interesting gauge as it looks at the amount of construction activity going on. It’s no surprise we’ve had a record construction boom of late, however recent figures suggest that is certainly slowing – the market is expecting to see a further slowing in the vicinity of -2.1% for the latest quarter.
AUD EXCHANGE RATES:
AUD/USD – 0.7578
AUD/GBP – 0.5723
AUD/EUR – 0.6455
AUD/NZD – 1.1095
AUD/JPY – 85.221
Gold – A$1689/oz
Silver – A$22.38/oz
WTI – US$56.89/barrel
DATA RELEASES TODAY:
AUD – MI Leading Index at 10.30am
AUD – Construction Work Done at 11.30am
USD – Core Durable Goods Orders at 12.30am
USD – FOMC Minutes at 6.00am (tomorrow morning)
***Above rates are indicative wholesale rates and intended as a guide only***
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