A key speech by a senior RBA official will determine what happens to the Australian dollar today

Time to ring De-belle on the Aussie dollar rally? Photo by Brendon Thorne/Getty Images.

The Australian dollar put in a mixed performance on Thursday despite the release of another robust jobs report during the session, rising against the US dollar and British pound but falling heavily against the euro and New Zealand dollar.

Here’s the scoreboard just before 7am AEST:

AUD/USD 0.7957 , 0.0008 , 0.10%
AUD/JPY 89.03 , 0.04 , 0.04%
AUD/CNH 5.3749 , 0.0023 , 0.04%
AUD/EUR 0.6840 , -0.0062 , -0.90%
AUD/GBP 0.6132 , 0.0026 , 0.43%
AUD/NZD 1.0751 , -0.0051 , -0.47%
AUD/CAD 1.0014 , -0.0005 , -0.05%

The largest move overnight came against the euro, losing close to 1% following the release of European Central Bank’s (ECB) July monetary policy decision.

While the bank left interest rates unchanged and made no change to its guidance on the outlook for policy, president Mario Draghi hinted that a reduction in the size of the bank’s asset purchase program could arrive in the months ahead.

“Draghi implied the ECB will discuss tapering of its asset purchases programme between September and November,” said Elias Haddad, senior currency strategist at the Commonwealth Bank.

“Draghi declined to give a specific meeting date, but we assume the ECB will give details on tapering of its asset purchase programme at the 7 September meeting.”

The prospect of smaller asset purchases from the ECB, along with a reluctance from Draghi to talk down the current level of the euro, ensured the common currency outperformed during the session.

Reports that an investigation into Russian involvement in the US presidential election by former FBI head Robert Mueller’s would examine financial transactions involving Trump’s businesses also assisted the euro’s move higher, seeing the US dollar fall to a fresh 11-month low.

That also helped the AUD/USD to recover having fallen below the 79 cent level earlier in the session.

AUD/USD 5-Minute Chart

Having rallied hard following the release of the minutes of the Reserve Bank of Australia’s (RBA) July monetary policy meeting earlier in the week, the movements in the Aussie dollar today will likely be determined by a key speech from deputy governor Guy Debelle in his home town of Adelaide during the session.

“For the AUD, it’s now pretty much all about the Guy Debelle speech at the CEDA/University of Adelaide function at 12.40pm AEST,” said David de Garis, economist at the National Australia Bank.

“The market will be especially attentive to any comments that Debelle has on the dollar and the 3.5% neutral policy rate referred to in Tuesday’s Minutes.”

On an otherwise bare data calendar in Asia, Debelle’s speech carries the potential to create serious movement in the Aussie dollar and rates markets.

A failure to hose down speculation that a rate hike could arrive as soon as late this year or early next year could easily see the Aussie trade above the 80 US cent level during the session.

Michele Bullock, RBA assistant governor, will also speak at 2.15pm AEDT.

Outside of RBA speak, the only other events of note this evening come from Canada with the release of retail sales and CPI data. The Bank of Canada hiked interest rates for the first time since late 2010 last week.

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