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Aussie at multi-year low following US employment data

Published October 8, 2018

Author: Dennis Li

Over the weekend we saw the Aussie extend its losses across the board against other major currencies. The AUDUSD edged lower to a fresh two-and-a-half-year low of 0.7039 following the release of US employment data on Friday. The AUDGBP also fell by 1.1% touching a 27-month low with optimism of a Brexit deal to be reached by the end of 2018.

  • Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail, leisure and hospitality sectors shed employment. The unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in US labour market conditions.
  • The US trade deficit hit a six-month high in August as exports dropped further amid declining soybean shipments. Imports hit a record high, suggesting that trade will impact Q3 growth numbers.
  • According to European Commission president Jean-Claude Juncker, the EU and Britain will reach a deal on Brexit in November if not in this month.
  • In an effort to lower financing costs and support economic growth amid the escalating trade tensions with the US; China’s central bank announced a steep cut in the level of cash that banks must hold as reserves.

We have a quiet week ahead in the local economic calendar however we get British GDP on Wednesday, US inflation data on Wednesday (PPI) and Thursday (CPI) with the Chinese Trade Balance on Friday.