The Australian dollar declined 0.5% versus the US dollar on Tuesday. The Australian dollar US dollar exchange rate closed at US$0.6851. The pair is well matched in trading on Wednesday, staying close to the flat line.
The Australian dollar lost ground in the previous session following the minutes from the Reserve Bank of Australia’s monetary policy meeting. The minutes from the meeting were more dovish than investors had been expecting, leaving the door firmly open for another interest rate cut, potentially early next year.
Today investors were looking beyond the dovish minutes to Australian jobs data for fresh impetus. Employment numbers from Australia will be released amid growing questions over the health of the Australian economy. Recent macro-economic data from Australia has been on the softer side, keeping interest rate cut expectations alive.
Last month total employment fell for the first time in 17 months. This triggered a selloff in the Australian dollar as investors assumed that the RBA would be forced to cut rates again next year. Analysts are expecting 14,000 jobs to have been created in November, replacing those jobs lost in the previous month. The unemployment rate is expected to remain unchanged at 5.3%, still some distance from February’s low of 4.9%. Such weak numbers are unlikely to quell fears of the RBA cutting in the near future and could keep any upside in the Aussie dollar limited.
Dollar Shrugs Off Impeachment Trial
The US dollar was broadly in favour in the previous session and is seen extending those gains again today versus its peers. With a lull in US — China trade dispute headlines, investors are focusing on US economic data, which has been solid. US housing starts impressed on Tuesday and US manufacturing production beat analysts’ expectations, jumping 1.1% month on month in November, this was well above the -0.7% decline in October. The strong data fuelled optimism that the slump in the US manufacturing sector could be easing, boosting the dollar.
There is no high impacting US data due today. Trump’s impeachment trial could attract some attention but is unlikely to drive the dollar, as the risk of him being removed from office is small.
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. |