Author Brett Gordon
The Australian dollar didn`t manage to break outside recent ranges, due to relatively quiet start to the week across currency markets ahead of a loaded economic docket in the latter half of the week. With little to not much domestic and international macroeconomic calendars the AUD remained at the clemency of offshore stimuli. US dollar gains forced the AUD toward support at 0.6850 touching lows of 0.6856 before edging incrementally higher closing the day at 0.6870.
Attentions now turn to Thursday’s employment change and unemployment report as the primary domestic economic marker. Labour market strength remains a key driver governing RBA policy decision making and a break outside of expectations could prompt a break outside the current ranges.
The International Monetary Fund trimmed back its 2020 global economic growth forecast to 3.3 percent from 3.4 percent estimated previously in October. The global economy expanded by 2.9% in 2019, its slowest pace since the global financial crisis, the slowdown was largely driven by trade wars weighing on exports and investments. The report, however, contains a sense of modest hope, noting that risks are “less skewed” toward negative outcome.
The Bank of Japan have their rate announcement today, with expectations to remain on hold. Employment data from the UK will be the key focus tonight, with any miss in expectations likely to increase the chances of a BOE rate cut when they next meet January 30th.NZ global dairy trade auctions will be released this evening, with 2 out of the last 3 auctions resulting in a price contraction and will likely be watched for further direction on the NZD.
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