After three consecutive session of gains, the Australian dollar is heading southwards in trading on Thursday. The Aussie dollar US dollar exchange rate dipped 0.3% to US$0.6826 at the time of writing.
The Australia dollar is out of favour in the European session on Thursday, as investors digest more disappointing data and amid uncertainty surrounding the US — China trade talks. Data showed that Australian consumers didn’t spend in October despite the government’s income tax cuts and falling interest rates as retail sales flat lined in the month. Analysts had been expecting growth of 0.3% month on month.
The data came just a day after the national accounts showed household consumption at its weakest since the global financial crisis and following a disappointing GDP. With economic stats pointing to a slowdown in the Australian economy, investors are assuming that the Reserve Bank of Australia will look to cut interest rats again next year after three rate cuts this year. The Australian benchmark interest rate is currently at a record low of 0.75%.
Trade remains in focus as investors weigh up the chances of the US rolling back tariffs in order to secure a phase one trade deal with China. Any signs that the two sides are drawing closer to sighing a deal could boost the Chinese proxy, the Australian dollar.
US Dollar Investors Look To NFP For Direction
The dollar was easing lower across the European session as investors digested a mixed bag of data so far and as they looked ahead to US factory orders.
US jobless claims were a strong point from today’s numbers. The number of people filing application for unemployment benefits unexpectedly fell last week to a 7-month low. Claims dropped to 203,000 for the week ending 30th November, this was the lowest since mid-April and suggests that the US labour market remains solid even if the economy is slowing.
Amid mixed trade messages and conflicting data Investors will now look ahead to tomorrows all important US non-farm payroll data. Analysts are expecting strong job creation in November, higher that the 128,000 created in October. Unemployment rate is expected to remain steady at 3.6% with a slight increase. A strong reading could help boost the dollar.
| What do these figures mean? |
| When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.
For example, it could be written: 1 USD = 0.6784 AUD Here, $1 is equivalent to approximately A$0.67. This specifically measures the US dollar’s worth against the Australian dollar. If the Aussie dollar amount increases in this pairing, it’s positive for the US dollar. Or, if you were looking at it the other way around: 1 AUD = 1.4739 USD In this example, A$1 is equivalent to approximately $1.47. This measures the Australian dollar’s worth versus the US Dollar. If the US dollar number gets larger, it’s good news for the Aussie dollar. |
