- The Australian dollar pushed higher on Wednesday, benefiting from buying against the euro and strength in crude oil prices.
- Another soft Australian wage report was largely overlooked by traders.
- Australian jobs data for April will be released during the session.
The Australian dollar’s roller coaster ride continued on Wednesday, recovering from an early dip to close higher against most of the major crosses.
Here’s the scoreboard as at 7am in Sydney.
AUD/USD 0.7514 , 0.0043 , 0.58%
AUD/JPY 82.95 , 0.51 , 0.62%
AUD/CNH 4.7715 , 0.0169 , 0.36%
AUD/EUR 0.6363 , 0.0052 , 0.82%
AUD/GBP 0.5569 , 0.0039 , 0.71%
AUD/NZD 1.0890 , 0.0006 , 0.06%
AUD/CAD 0.9609 , -0.001 , -0.10%
As seen in the scoreboard, the Aussie rose strongly against all majors except the Canadian and New Zealand dollars, benefiting from buying against the euro and renewed strength in crude oil prices.
“Commodity currencies have all made a decent comeback since Australia went home on Wednesday despite a fairly mixed performance from commodity prices, albeit Brent crude has now topped $79 for the first time since November 2014,” said Ray Attrill, Head of FX Strategy at the National Australia Bank.
“Euro weakness has much to do with it, linked to Italian politics.”
Buying against the euro helped the Aussie recover from an early dip following the release of another soft Australian wage report that reinforced the view that the RBA is unlikely to lift interest rates for the foreseeable future.
It also helped the AUD/USD to push higher despite another lift in US 10-year bond yields.
As seen in the hourly chart below, the AUD/USD has been on a roller coaster ride this week, rising, then falling, before recovering again.
The wash up is it’s really gone nowhere.
Whether that trend continues today will likely be determined by offshore factors despite the release of Australian jobs data for April.
Economists expect an increase in employment of 20,000, leaving the unemployment rate steady at 5.5%.
This 10-second guide has more on what to look out for in the report.
While the Aussie will almost certainly react to the release, whether those moves are sustained is questionable, especially given the price action seen following the wage report.
Outside of Australia, the other regional highlight today will be provided by New Zealand’s federal budget, released at midday AEST.
Later in the session, markets will eurozone construction output along with jobless claims and Philadelphia Fed manufacturing survey in the US.
While the data calendar in Europe and North America is quiet, the central bank speaking calendar is not with several policymakers from the Bank of England and US Fed scheduled to deliver speeches.
The Bank of Canada will also release its quarterly review.