The Aussie dollar is on a winning streak never seen before

16 Sep 2000: (L to R) Ashley Callus, Chris Fydler, Michael Klim and Ian Thorpe of Australia celebrate after winning Gold in the Mens 4 x 100m Freestyle Relay at the Sydney International Aquatic Centre during Day One of the Sydney 2000 Olympic Games in Sydney, Australia. They won the Gold in a World Record time of 3 mins 13.67 secs. Mandatory Credit: Al Bello /Allsport

The Australian dollar pushed higher yet again on Thursday, continuing to benefit from improved investor sentiment, stronger crude oil and iron ore prices and another rally in stocks.

Here’s the scoreboard as at 8.30am AEDT.

AUD/USD 0.7865 , 0.003 , 0.38%
AUD/JPY 88.66 , 0.54 , 0.61%
AUD/CNH 5.1043 , 0.0162 , 0.32%
AUD/EUR 0.6516 , -0.0003 , -0.05%
AUD/GBP 0.5803 , 0.0007 , 0.12%
AUD/NZD 1.0991 , -0.0052 , -0.47%
AUD/CAD 0.9824 , 0.0006 , 0.06%

After beginning the session buying .7835, the AUD/USD reversed earlier losses following news that activity levels across China’s services sector improved at the fastest pace in over three years in December.

That report, following a raft of other positive indicators on the health of the global economy, helped to lift risk assets in Asia, including the Aussie.

According to data from Thomson Reuters, the AUD/USD hasn’t fallen in any of the past 14 sessions, making this the longest winning streak since the Aussie was floated back in December 1983.

It’s unprecedented, in other words.

As has been the case for some time now, traders overlooked stronger-than-expected US economic data released during the session, paying scant attention to a 250,000 increase in private-sector payrolls in December, well above the 190,000 level expected.

“It’s again the story of a weaker US dollar as the fact its data is solid and improving is lost on traders focused on expectations that European strength will drive the ECB to chase the Fed, and that synchronised global growth will in fact drag most central banks along the tightening path,” said Greg McKenna, chief market strategist at AxiTrader.

That goes some way toward explaining the Aussie’s mixed performance against the crosses on Thursday, demonstrating that much of the moves largely reflected US dollar weakness.

The Aussie lost marginal ground against the euro and around 0.5% against the Kiwi, the latter helped by technical-related buying in the NZD/USD.

AUD/USD Daily Chart

Turning to the day ahead, most of the major data releases will arrive in the second half of the session, headlined by US non-farm payrolls and Eurozone inflation for December.

For payrolls, markets are looking for an increase of 190,000, down from 228,000 in November. The unemployment rate is tipped to remain steady at 4.1% while average hourly earnings are expected to lift by 0.3%, leaving the increase on a year earlier steady at 2.5%.

With strong growth in payrolls now all but expected, the most important part of today’s release will be the wage figure, along with measures of labour market slack such as the underemployment rate.

As for the Eurozone inflation report, annual growth is expected to slow to 1.4%, down from 1.5% in November. Core inflation — excluding energy and food prices — is also expected to decelerate to 1% from 1.1% a month earlier.

With those two reports arriving later in the day, it’s likely that all other data reports will play second fiddle in Asia.

In Australia, the ABS will release its November international trade report at 11.30am AEDT. A surplus of $550 million is forecast, up from $105 million in October.

If it does move the Aussie today, it’s unlikely to be much.

Other data out today includes Japanese services PMI, German retail sales, CPI from France and Italy along with trade and unemployment figures from Canada.

Released alongside the payrolls report, US factory orders, trade and ISM non-manufacturing PMI will also be released.

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