Market Update – 6th June 2016 – AUD/USD Rallies On Poor US Jobs Number

Good morning and hope you all had a lovely weekend. AUD/USD’s position this morning should surely put a smile on importers faces with the currency pair up around 2% since Friday afternoon thanks to a very poor U.S jobs number Friday night. The U.S was tipped to have added about 160K new jobs last month, but instead we saw the worst job gains since September 2011 at just 38K new jobs created. To make matters worse the month previous figure was also downgraded from 160K to just 123K. The overall impact of the poor jobs figures is a drop in the U.S dollar index and a sharp drop in the likelihood of a rate hike at the next Fed meeting on June 16th.

From my own research listening to various pod-casts and economists views on the matter of U.S interest rates it is certainly still possible that the U.S Federal Reserve hike rates again on June 16th – and that will have a huge impact to the downside for AUD/USD. The reason why some still think a rate hike could be on the cards? Inflation. Inflation is growing rather quickly and it will continue to grow throughout the year, if inflation is not kept in check then that could prove an even bigger headache for the Fed later in the year.

No data is due out today but commodities had a good session over the weekend and that’ll likely flow through to local equities in the mining space.

DATA RELEASES TODAY:

Nil

AUD EXCHANGE RATES:

AUD/USD – 0.7350

AUD/GBP – 0.5108

AUD/EUR – 0.6476

AUD/NZD – 1.0594

AUD/JPY – 78.472

***Above rates are indiciative wholesale rates and intended as a quide only***

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Patrick Downes

Senior Corporate FX Dealer

 Compass Markets

Contact Patrick for a quote on 0431 278 632

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