The RBA left rates unchanged at 1.5% yesterday with the accompanying rate statement suggesting that the RBA feel confident current interest rates are providing the necessary support for the local economy. They noted house prices continue to be an issue particularity on the east coast but also noted that inflation is slowing rising. The Aussie dollar is marginally higher across the board this morning, but we do face further head wind tonight which I’ll discuss in more detail below.
Ahead this evening is the double whammy of ADP Non-Farm jobs numbers (this is the preliminary number to the all important official non-farms number released Friday) and the U.S FOMC federal funds rate decision (their equivalent to our cash rate decision). As a result of this raft of economic data tonight its fair to say AUD/USD could be in vastly different territory this time tomorrow morning particularly if we see a surprise interest rate hike from the U.S Fed – however the market is not expecting this to happen – or a superb jobs number. Jobs numbers are expected to come off for a third month straight and appear to have peaked around the time Obama left office at just shy of 300K, this month estimates are for around 178K new jobs.
DATA RELEASES TODAY:
GBP – Construction PMI at 6.30pm
USD – ADP Non-Farm Employment Numbers at 10.15pm
USD – ISM Non-Manufacturing PMI at midnight
USD – FOMC Statement and Federal Funds Rate at 4.00am (tomorrow morning)
AUD EXCHANGE RATES:
AUD/USD – 0.7483
AUD/GBP – 0.5773
AUD/EUR – 0.6842
AUD/NZD – 1.0810
AUD/JPY – 83.871
***Above rates are indicative wholesale rates and intended as a guide only***
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