The Australian Dollar was close to US1c higher this morning following a mixed night on offshore markets.

Australia: Yesterday the Australian Bureau of Statistics (ABS) reported that the unemployment rate remained at 4.9% in April, while total employment fell by a seasonally adjusted 22,100. The forecast was for total employment tohave risen by 15,000 in April with the unemployment rate steady at 4.9%. The AUD lost almost US1cent following the data release, however slowly made up some ground throughout the remainder of the Asian session.

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Overnight the AUD benefited from a resurgence in risk appetite and buying interest following yesterday’s pull-pack. There is no major local or overseas data due today so the market will focus on next week’s release of the RBA minutes from its May board meeting. While the RBA left rates unchanged at the last meeting and even hinted that no rate hike was imminent, their monetary policy statement which was released just a few days later seemed to signal a rate hike as soon as next month.

Majors: Investors were still unsure about global economic growth overnight with the USD still benefitting from some safe-haven buying. Some recent global economic data has pointed towards a possible slowdown, especially in China and this has weighed on investor sentiment this week.

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Big swings in commodity prices have also added to the uncertainty. The EUR however bucked the trend, gaining ground against the USD despite worries about some of the regions fiscally stressed positions.

The EUR was also a beneficiary of the rebound in crude oil which recovered well following the previous days sell-off. China raised concerns when they lifted their reserve ratio requirement for its largest banks yesterday, essentially tightening credit and limiting growth. This has taken some of the bullish sentiment surrounding China out of the market for now.

Economic Calendar
EU Euro-zone GDP Q1

US CPI APR

US University of Michigan Confidence MAY

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