Australian Dollar Outlook – 4-12-13

Bell FX Currency Outlook: The Australian Dollar hit highs overnight that we have not seen since January after recovering from the 1.0500 level after a poorer than forecast March jobs number yesterday morning.

Australia All analysts predicted that the jobs figure for March had to retreat after the largest rise in 13 years in February when jobs initially were reported to have grown by 71k. The figures did fall last month with employment lower by 36k jobs which was larger than the market was predicting which sent the AUD straight down to 1.0500 a short time after the announcement. Full time and part-time employment fell by 7k and 28k, respectively. The unemployment rate rose from 5.4% to 5.6% as the participation rate fell back slightly from 65.3% in February to 65.1% last month. With some analysts speculating that the next move on official cash rates in Australia might be upward late in 2013 or in early 2014, this view was a bit less popular after these figures were released and reignited the discussion that the RBA continues to have a slight easing bias. With equity markets continuing to move higher, the higher yielding currencies such as the AUD and NZD are attracting further interest from investors. With the US Dow and S&P 500 equity indices continuing to hit new historical highs, the momentum toward the AUD continues to be very strong. Today there are very few data releases in Asia and we expect a quiet day of trading.

Majors: Overnight it was announced that US weekly jobless claims fell by 42k to 346k in the week starting April 6. Tonight in the US we will see the release of Q1 earnings reports from two large US banks, JPMorgan Chase and also Wells Fargo as well as retail sales data for the month of March. The University of Michigan consumer confidence survey will also be announced. In Europe, the European Union will begin another meeting and at the top of the agenda is the possible extension of loans to Portugal and Ireland to a later date beyond their existing term of seven years. Most analysts expect this will happen which may give a lift to the respective economies.

Economic Calendar

12 APR AU Employment Change

GE Consumer Price Index

US Import Price Index

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