Australian Dollar Outlook - 13 January 2014
Bell FX Currency Outlook: The Australian Dollar traded to .9000 on Friday night as the US non-farm payroll data fell well short of expectations.
Australia: With most analysts expecting an increase of 200k of new jobs being created in December, the AUD reacted very quickly when the actual
figure was only 74k new jobs which was the lowest figure since January 2011.
The bad weather in the US is thought to have affected the figures significantly. The AUD shot to .9000 as the USD was weaker across the board as doubts surfaced about the pace of the US Federal Reserve's bond tapering program and whether the reduction of USD10bn in purchases would continue this month.
Most analysts believe the US Fed will wait to see if the weaker jobs figures persist over the next month before they would reconsider their path of reductions in bond purchases.
With the market going into the announcement generally bearish on the AUD, we believe some of this buying of the AUD was related to stop losses being triggered. This event overshadowed the release of China's trade figures for 2013 on Friday which saw a December trade surplus of USD25.65bn which was down from the USD33.8bn figure the previous month.
The total foreign trade surplus for 2013 was USD259.75bn. Overall Chinese exports rose by 7.9% and imports 7.3% for the year which
bodes well for our local economy in the near term. New home sales in November in Australia rose by 7.5% as measured by HIA.
Today we will see the release of ANZ job ads numbers and later in the week we will see our own local labour report on Thursday.
Majors: The US unemployment fell from 7% to 6.7% as the participation rate fell from 63% to 62.8%. Although the low number was a concern
there was a revision of 38k upwards to the previous two months of job figures.
This week there is a lot of data to be released in the US starting with retail sales on Tuesday and followed by Empire State manufacturing data on Wednesday, CPI on Thursday and housing starts and consumer confidence on Friday. There is a US Federal Reserve speaker each day
this week and all their comments will be keenly listened to for hints of any change in the Federal Reserve's bond buying strategy.
The AUD cross rates strengthened across the board on Friday as the USD was weaker against all the major currencies except for the CAD whose labour data on Friday was poorer than expected. Today markets in Japan will be closed for a public holiday.
Economic Calendar
13 JAN AU Housing Finance (Owner-Occupied Number, MoM)
AU ANZ Job Advertisements MoM
NZ REINZ Houring Report