RBA in focus
The Australian dollar eased from recent highs, producing the first down day for AUD/USD since 1 December, as markets look ahead to today’s Reserve Bank of Australia decision.
The AUD/USD fell 0.3% as it turned from three-month highs. The Aussie was stronger in other markets, however, with AUD/EUR and AUD/NZD both up 0.2%.
The RBA is expected to hold interest rates steady, with the central bank more concerned about inflation after annual headline inflation climbed from 3.6% in September to 3.8% in October.
The October CPI result virtually eliminated a chance of a rate cut today, and markets now believe the most likely next move will be a rate hike by August next year.
The RBA decision is due at 2.30pm AEDT.
USD higher in Asia
The US dollar was stronger across Asia yesterday, with a key central bank decision also looming in the US.
The Federal Reserve is forecast to cut interest rates when it meets early Thursday morning (APAC time). Financial markets see a 99% chance of a 25bps cut to a new range of 3.50% to 3.75%.
The USD index was stronger, climbing from a six-week low, with the greenback strength most notable in Asia.
The USD/JPY led gains, with the pair up 0.4%. The USD/SGD gained 0.2%.
All eyes on US jobs data ahead of Fed
FX markets will be looking to a swathe of US employment data today ahead of Thursday morning’s Federal Reserve decision.
With the official October non-farm payrolls report cancelled and the November report delayed until 17 December – all due to the US government shutdown – financial markets have been forced to look at data previously seen as “second tier.”
Tonight’s JOLTS report – the job openings and labour turnover series – has been trending lower since its mid-2022 peak, which was the top of the global post-Covid employment market. The index has recently steadied. The October report is forecast at 7.1m openings after the August report found 7.2m openings (the September JOLTS report was cancelled due to the shutdown). The new ADP weekly jobs report and the NFIB small business index numbers are also due.
The latest jobs data likely won’t impact this week’s Fed decision, but further bad news from the US labour market may make further cuts next year more likely – and could cause the USD to weaken further.
All eyes on still-stretched Aussie
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 8 – 12 Dec
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
