AUD Drifts Higher Despite Strong US Jobs Data

AUD

The Aussie Dollar opens the week higher against the majors, despite the increased chances of a US rate hike from a bullish job report. Asian equities were red into the close, with the ASX down 0.2% and the SHANGHAI COMP down 0.3%. There was no data out locally on Friday, with this week being rather sparce as well. ANZ Job Advertisements m/m is being released at 11:30am today, which could give some insight into local employment, previously 0.8%. China has their CPI and PPI m/m being released on Wednesday, which are both expected to increase, which could flow on to local prices.

USD

The AUDUSD opens the day flat, with the pair keeping above the 0.72 barrier, opening this morning at a rate of 0.7206. Wallstreet was soft into the close, with the DOW JONES down 0.5%, S&P 500 down 0.4% and the NASDAQ down 0.3%. On Friday the US jobs report was released and showed that the US economy generated an extra 162,000 jobs in August, which was nearly triple the consensus expectations, and helped keep the unemployment rate at 4.1%, which was in line with forecasts. Average hourly Earnings m/m came in as expected at 0.3%, up from 0.2%. These results saw the market expectations of Fed hike firm around 50%. Today is a bank holiday for the US, with eyes now shifting to this Friday’s inflation print.

EUR

The AUDEUR opens slightly higher at 0.6205, hovering around 22-month highs as markets expect the RBA to increase interest rates later this month. European equities were mixed on last week’s close, with the DAX +0.2% and CAC -0.1%. It was a quiet end to the week for the Europeans, with Retail Sales m/m coming in softer at -0.6%, expected at 0.3%. Looking forward, tonight we have the Revised GDP q/q, which is expected to remain at 0.4%, with Thursday’s Rate Announcement taking the spotlight, widely expected to hike to 2.65%.

GBP

AUDGBP opens the week flat at 0.5331, still sitting at a three-month high. UK equities closed flat with the FTSE at 0.0%. On Friday evening, BOE Gov Bailey spoke at the London School of Economics and noted that weak productivity and shocks such as ​COVID-19 were behind a climb in public debt ‌across advanced economies, which in turn was pushing up borrowing costs. 

NZD

AUDNZD opens in the green at a rate of 1.2254, maintaining a 13 year high it has held for a majority of the year. Looking at the week ahead, no major releases expected for New Zealand. Tomorrow will see Manufacturing Sales q/q released which previously printed at 2.8%. Looking at the week ahead for the UK, the main event will be this Friday with the release of their GDP m/m figures which are currently forecasted at 0.0% from a previous +0.3%.