The Australian dollar managed to eek out a gain versus the US dollar on Wednesday. The pair closed 0.07% higher at US$0.6876. The Australian dollar pushed higher early on in the European session on Thursday, reaching a peak of US$0.6881. However, has since pared its gains and is trading flat versus its US counterpart at the time of writing.
The Australian dollar struggled for direction on in trading on Thursday amid mixed macro-economic data releases. Following President Trump’s speech in the previous session US – Iran tensions have eased allowing investors to turn their attention back to the economic calendar.
Data from the Australian Bureau of Statistics showed that the Australian trade surplus widened to AUD$5.8 billion from AUD$4.5 billion in October. This was short of analysts’ expectations of AUD$5.9 billion. The improvement in the trade position has been largely owing to resources exports and a weaker Australian dollar.
Data from China was softer with consumer prices inflation remaining steady at 4.5% year on year, instead of ticking higher to 4.7% as analysts forecast. Whilst a widening trade surplus is positive for the Australian dollar, weak inflation in China, Australia’s principal trading partner is negative. As a result, the Aussie dollar is trading relatively flat.
Looking ahead, Australian service sector data could drive movement in the Aussie dollar heading into Friday.
US Dollar Investors Look To NFP
Volatility in the US dollar has calmed following the ebbing of tensions in the Middle East. The dollar traded broadly higher versus its peers on Wednesday, in the wake of the missile attacks from Iran and as President Trump collaborated in de-escalating the tense situation.
US ADP private payroll data also under pinned the greenback with 202,000 jobs created in te private sector in December, well ahead of the 160,000 forecast. Last month’s figure was also revised higher from 67,000 to 124,000. This is the latest sign that the US labour market is looking healthy. Given the strong correlation between the US non-farm payroll and the ADP report, the data bodes well for tomorrow’s US labour department’s job report the non-farm payroll.
| 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. |