
A big
disappointment in the jobless figures for August in Australia ,
announced overnight (European time), has resulted in a fairly dramatic fall in
the Aussie, due to renewed expectations of further reductions in interest rates
by the Reserve Bank of Australia
as a result. Leading indicators of job growth Down Under in the future are also
a cause for concern.
There had
been a determined retrace of what was the dominant downward trend in the AUDUSD
pair up to the release of the unemployment report. However, as noted here
previously, apart from an apparent turnaround in Chinese growth prospects (how
can such a large economy turn on a sixpence like that?), nothing else has
changed. In particular, US Quantitative Easing (QE) will be tapered, possibly
as early as next week. US
bond markets have been pricing in this factor for some time. When tapering does
start the US dollar is expected to rise (When USD rises, the AUDUSD pair
falls). Gold, this morning, is also weaker, another indicator that focus might be back on tapering rather than, for example, the possibility of US airstrikes in Syria.
Foreign
Exchange traders around the world will not have let this go unnoticed.
Great article.. have gained alot about AUD/USD earlier i wasn't aware.
ReplyDeleteI think it's fairly stable in the 90c area in the medium term
ReplyDelete