The Australian dollar remains range-bound, dull and directionless

  • The Australian dollar remains range-bound, dull and directionless at present.
  • US non-farm payrolls growth beat expectations in March, although wages growth undershot to the downside.
  • There’s very little on the economic calendar on Monday that appears likely to spur broader currency markets back to life.

The Australian dollar remains range-bound and directionless, much like most other major currency pairs at present.

Here’s the scoreboard as at 7.55am in Sydney on Monday.

AUD/USD 0.7104 , -0.0001 , -0.01%
AUD/JPY 79.34 , 0.12 , 0.15%
AUD/CNH 4.7664 , 0.007 , 0.15%
AUD/EUR 0.6332 , 0.001 , 0.16%
AUD/GBP 0.5447 , 0.0006 , 0.11%
AUD/NZD 1.0546 , 0.0017 , 0.16%
AUD/CAD 0.951 , 0.0003 , 0.03%

And here’s a four-hourly chart showing the AUD/USD has now been stuck in a narrow trading range between .7000 and .7200 for over two months.

Not even the release of US non-farm payrolls data for March could wake the Aussie dollar from its slumber on Friday, initially rising in the wake of the report before giving back ground towards the close.

“March US payrolls growth beat expectations, but market reaction was muted both for the US dollar and Treasuries,” said David de Garis, Economist at the National Australia Bank.

Payrolls increased by 196,000, above the 177,000 level expected, leaving the unemployment rate steady at 3.8%. However, hourly wages growth undershot forecasts for an increase of 0.3%, lifting by just 0.1% from a month earlier.

Despite the wages undershoot, the US dollar regained its poise late in the session, seeing the AUD/USD fall back to close at .7105.

“The AUD did drift lower on Friday after payrolls, the USD getting something of a bid tone despite the further rally in stocks, a lower VIX and non-threatening US average earnings growth,” de Garis said.

Even with investor risk appetite now far stronger than earlier in the year, and despite firmer commodity prices, the Aussie dollar remains stuck in a thin trading range, largely due to widespread expectations that the Reserve Bank of Australia will cut interest rates later in the year.

Pointing to another quiet session to begin the week, there’s little on the economic or events calendar on Monday that appears likely to shake the Aussie dollar from its slumber.

Locally, ANZ Bank will release its monthly job ads survey at 11.30am AEST. Although not a noted market-mover, with the RBA’s interest in local labour market data now elevated, a surprise result in either direction could result in some modest volatility in the Aussie.

Later in the session, other highlights include German trade data for February, Eurozone investor sentiment for April, Canadian housing starts and building permits along with factory orders from the United States.

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