Aussie pressured ahead of jobs
The Australian dollar was down sharply overnight, with the AUD/USD falling 0.6%, ahead of today’s key June employment report.
The employment report is seen as critical for further policy decisions from the Reserve Bank of Australia with a tight labour market driving wages growth which in turn pushes inflation higher.
After the May report saw a very strong 75.9k result, markets are looking for 15k new jobs in June. The unemployment rate is forecast at 3.6%.
The Australian dollar was also pressured by a stronger US dollar which extended a recent rebound from 15-month lows.
NZ inflation higher, but UK lower
In other markets, the focus was on inflation, with New Zealand CPI higher than expected yesterday.
NZ’s June-quarter headline inflation was reported at 1.1% – higher than the 1.0% forecast – while annual inflation came in at 6.0% versus the 5.9% forecast.
The kiwi was higher after the result but markets still do not see any further hikes from the Reserve Bank of New Zealand. The NZD later fell in line with a stronger US dollar.
UK inflation sparked fireworks overnight after a larger than expected drop. Annual headline inflation fell from 8.7% to 7.9% while the core reading dropped from 7.1% to 6.9%.
The GBP has been the strongest performing G10 currency this year on expectation that high inflation would cause the Bank of England to raise rates by more than other central banks. The GBP eased overnight.
China rate decision due
China’s economic policy is in focus today with the monthly loan prime rate decision – China’s official policy rate – announced today.
China cut this official policy rate last month with the one-year rate dropped from 3.65% to 3.55% in a sign of growing anxiety around China’s growth rate.
GBP lower after CPI drop
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 17 – 21 July
All times AEST
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