Australian dollar outlook 06/12/2010
Australia: The Australian Dollar had a strong rise on Friday evening finishing over 0.9900 as the weaker than expected non-farm payroll data from the USA for November fell short of expectations.
With the market expecting the job sector to add 145k jobs, only 39k new jobs were added, which pushed the unemployment rate up to 9.8% from 9.6% the previous month.
This was a shock to the market, which had been expecting a better result since better manufacturing, and retail sales numbers had been announced in the last week.
The market anticipates further quantitative easing actions by the Federal Reserve Bank, with lower interest rates for longer in the US and more easing likely to be beyond the US$600bn that has been announced.
Commodities were strong, with oil hitting a 25-month high to over US$89 a barrel and gold topping US$1400 again, finishing at US$1406 an ounce.
Silver hit a new 30-year high at over US$29 an ounce.
Locally job ads for November are being released today with the RBA decision on interest rates due tomorrow.
After the rise last month in the cash rate to 4.75% no change is expected.
On Thursday our jobs data is released and most anticipate a rise of 20k in employment and a slight fall in the unemployment rate to 5.2%.
We expect the AUD to remain steady over the next several days.
Majors: The pressure on the EUR over the recent week or so seems to have been forgotten as the ECB did their own form of quantitative easing and bought Portuguese and Irish bonds which helped push the EUR/USD rate over 1.3400 after the weaker US jobs figure.
In the background, the German Bundesbank has doubled their GDP forecast for 2010 to 3.6%.
Adding to the positive sentiment toward the EUR, Spain announced austerity measures which a week ago they ruled out.
The US continues to go the other way with President Obama’s debt panel cancelling plans for US$3.8tr of budget cuts in light of the political bickering between the two major parties.
Newsletter: Subscribe to receive this report daily