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Australian Dollar Has Tough Day; Will Go Easy Ahead of US Payrolls Data

audusd-chart

It’s been a tough twenty-four hours for the Australian dollar.

The “Aussie” was hammered after Thursday’s woeful retail sales data, which showed that sales declined in August by 0.6% – the biggest fall in four years. To add insult to injury, previously released data for July was revised down to -0.2%, from 0.0%.

AUD/USD has fallen by the hour since the sales report, assisted by moderately hawkish comments from regional Fed presidents John Williams and Patrick Harker, which helped the US Dollar Index climb to a seven-week high of 93.99. By 03:30 GMT on Friday, the Australian dollar had fallen more than a cent against its American counterpart to a twelve-week low of $0.7748, from $0.7861 prior to the release of sales data.

AUD/JPY shared the same fate as AUD/USD, falling from levels around ¥88.70 to ¥87.45 on Friday morning.

AUD/CNY fell from ¥5.23 to ¥5.155.

Due to underlying New Zealand dollar weakness, the Australian dollar lost only half as much in relative terms against the “kiwi.” AUD/NZD’s fall from 1.0985 to 1.0917 did little to put off the technical research team at National Australia Bank, who said on Thursday that they were still targeting 1.14 in the pair – an exchange rate not seen since 2015.



AUD/USD 3 Month Chart

Foreign exchange traders should expect a period of calm in the coming hours ahead of all-important US payrolls data.

Hurricanes Harvey and Irma likely slowed job creation in September and, consequently, Friday’s payrolls figure is expected to print only +82,000; well below the 150k-250k bracket of monthly jobs growth that traders have become accustomed to over the past few years. Any print above 100,000 would likely see the Australian dollar dip again versus USD.

Economists are also looking for a pick-up in US hourly earnings, which would indicate to decision makers at the Federal Reserve that US employment levels are at or near their maximum and that monetary policy stimulus can be further removed. The median-estimate for September’s earnings growth is +0.3%, from +0.1% in August.

Readers in need of Australian dollars can save big on exchange rates by using BER’s comparison calculators for AUD foreign currency transfers and AUD travel cash.

Consider that with today’s best value FX provider, an Australia-bound transfer of GBP 25,000 would return AUD 41,880, and that’s AUD 1,700 more than would be given by a retail bank or Bureau de Change (today’s bank average: AUD 40,166).

Joel Wright Author: Joel Wright

Joel has been involved in the markets for the past 10 years. During that time he’s worked in market analysis teams in London, in the financial technology sector in Singapore – working mostly with automated trading tools and algorithms – and most recently he’s been planning FX risk hedging for an SME in Bangkok. Joel has a first-class honours degree in Financial Services and currently writes about foreign exchange for several global businesses.

You can get in touch with Joel via email here or via the contact page.
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product. Full Disclaimer

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