Australian Dollar Outlook 10/03/2011
Australia: The market consensus forecast is for an increase of 20,000 in the number of employed in February, with the unemployment rate expected to remain steady at 5.0%. Should the figure come out on the strong side, expect the AUD to rally higher and maybe even break through resistance levels around the USD1.0150-1.0180 area.
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A strong jobs number may just give the RBA the evidence they need to hike official interest rates. In contrast to the Australian situation, the RBNZ have announced this morning they will be cutting New Zealand's official interest rate by 50bps. Their move is a pre-emptive one to try and lessen the economic impact of the recent earthquake in Christchurch. The accommodative stance should only be temporary with the tightening cycle expected to resume in 2011.
Majors: Currency markets were quite subdued overnight despite a number of international events grabbing the headlines. The situation in Libya remains volatile with talk that recent unrest in the Middle East could soon spread to Saudi Arabia, the world's largest crude exporter. The WTI crude oil price traded above USD105 a barrel overnight. Concerns over European debt also remain prevalent after a Portuguese bond auction overnight highlighted the fact that Portugal is now paying much more than it was six months ago to borrow from the markets. Also overnight it was revealed that Greece's dire economic situation is far from improving after it was reported that the unemployment rate jumped to 14.8% in December, up from 13.9% in the previous month. Base metals were sold off across the board last nights on concerns about global growth prospects, with Lead down 4.2% and zinc off by 5.1%.
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