The Australian dollar continues to hover near multi-month highs

Photo by Clement Mahoudeau/IP/Getty Images

The Australian dollar remains near multi-month highs, continuing to benefit from elevated levels of investor sentiment and US dollar weakness.

Here’s the scoreboard as at 8.30am AEDT.

AUD/USD 0.7861 , -0.0001 , -0.01%
AUD/JPY 88.9 , 0.15 , 0.17%
AUD/CNH 5.0920 , 0.0085 , 0.17%
AUD/EUR 0.6536 , 0.0012 , 0.18%
AUD/GBP 0.5796 , 0.0014 , 0.24%
AUD/NZD 1.0967 , 0.0018 , 0.16%
AUD/CAD 0.9756 , 0.0002 , 0.02%

After falling to as low as .7832 on Friday following the release of a weak Australian international trade report for November, the AUD/USD rebounded during the second half of the session, gaining ground following a mixed US jobs report December and continued strength in global stocks.

“The December US non-farm payrolls number came in at 148,000 versus 190,000 expected, but after the solid ADP report on Thursday many were looking for a print above the 200,000 mark,” said Rodrigo Catril, currency strategist at the National Australia Bank.

“Average hourly earnings printed in line with expectations at 0.3% month-on-month taking the year-on-year number to 2.5% and the unemployment rate held steady at 14.1%, a 17 year low.”

Catril said the initial headline numbers saw the US dollar and US treasury yields dip, albeit temporarily.

“The story remains relatively unchanged,” he says. “The US labour market remains solid and the monthly rise in average hourly earnings points to a steady rise in wage growth which should keep the Fed on track for three hikes this year.”

While US treasury yields and dollar both rebounded against the likes of the euro and yen, the Aussie continued to push higher, mirroring yet another surge in US stocks.

As such, the AUD/USD closed the session almost unchanged at .7862. It briefly hit a high of .7874, leaving it sitting at the highest level since mid-November.

AUD/USD 4-Hour Chart

Turning to the day ahead, it looks set to be a quiet one in Asia with Japanese markets off on holiday and no major data release scheduled.

Given the lack of clear catalysts, the AUD/USD will likely take its cues from Chinese markets, especially movements in the USD/CNY and commodity futures.

Later in the session, data highlights include German industrial orders, UK house prices from Halifax, eurozone retail sales and US consumer sentiment.

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