The Australian dollar sunk to lows of 94.63 US cent following on from the RBA statement yesterday afternoon in which the Aussie was labelled “uncomfortably high” by Governor Stevens which echoed his sentiments from the week earlier.
The Aussie did not sit in spot for long riding a spike in US dollar weakness during the European session. Services PMI was ahead of market expectations in the UK giving the Pound a lift back up to above 1.60 USD as it surged over a cent to peak at 1.6062 USD. The Aussie coat tailed through this period trading up to 95.37 US cents, although it did pull back about 60 pips whilst the Pound traded not far off the highs through to this morning.
The Euro and US dollar were the two currencies that were weaker through the overnight trade sessions. The Euro struggled with quite negative Spanish unemployment data and a bit of trepidation leading into the ECB meeting later in the week and what to expect from it. The US dollar was met with solid Non-Manufacturing PMI but eased as the end of the week which is incredibly risk sensitive with Non-Farm Payrolls and GDP played on trader’s sentiment. The Euro slumped down to 1.3449 USD while the Aussie was able to trade back above 95 US cents late in the US session off the back of the easing Greenback.
This morning trading has already been active with New Zealand unemployment dropping to 6.2% and even though it was in line with predications the Aussie dropped over half a cent to go as low as 1.1342 NZD. The Australian dollar will remain actively traded with trade balance data coming up shortly with it likely to sit in deficit.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
