The Australian dollar is getting beaten up


The Australian dollar continues to languish at four-month lows, undermined by souring investor risk sentiment, falling commodity prices, weak Australian wage growth and robust US economic data which all but cemented the view that the Federal Reserve will lift rates again in December.

Here’s the scoreboard as at 8am AEDT on Thursday.

AUD/USD 0.7588 , -0.0041 , -0.54%
AUD/JPY 85.62 , -0.92 , -1.06%
AUD/CNH 5.0328 , -0.0296 , -0.58%
AUD/EUR 0.6435 , -0.003 , -0.46%
AUD/GBP 0.5762 , -0.0032 , -0.55%
AUD/NZD 1.1034 , -0.0058 , -0.52%
AUD/CAD 0.9682 , -0.0029 , -0.30%

After opening the session at .7629, the AUD/USD was poleaxed following the release of Australian wage growth data which came in well below expectations, raising fresh concerns that underlying wage pressures may not have bottomed yet.

That saw the Aussie tumble below the US 76 cent level for the first time since July 10, a level where it currently sits in early Asian trade on Thursday morning.

AUD/USD 4-Hour Chart

Continued declines in stocks and commodity markets, along with strong US economic data released during the session, also weighed on the Aussie.

In October, core US consumer price inflation (CPI) — that which excludes food and energy prices — rose by 0.2%, seeing the annual rate tick up to 1.8% from 1.7%.

US retail sales also rose by 0.2% in October, topping forecasts for flat growth during the month. September’s increase, originally reported as a gain of 1.6%, was also revised up to 1.9%.

The retail control group — an indication on household consumption in US GDP — also rose by 0.3% following a 0.5% increase in September.

The reasonable data set all but cements the view the US Federal Reserve will lift rates again next month, helping the US dollar to recover after it fell heavily in the European session.

After Wednesday’s weak wage data, Australia’s labour market remains in focus today with the nation’s October jobs report set to be released at 11.30am AEDT.

Economists are looking for an increase in employment of 18,000, down marginally on the 19,800 rise reported in September. Unemployment is expected to remain steady at 5.5%.

This 10-second guide has more on what to expect from this key report.

Later in the session, data highlights include UK retail sales, French unemployment, the final read of eurozone inflation for October, along with weekly jobless claims, trade prices, Philadelphia Fed manufacturing index, industrial production and NAHB home builder sentiment from the US.

It’s also a busy session for central bank speeches with Carney, Broadbent and Cunliffe from the BoE, along with Mester, Brainard and Kaplan from the US Fed, all in action.

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