The Australian dollar climbed off the mat on Thursday after tumbling a day earlier, supported by strong Chinese economic data, US dollar weakness and an enormous reversal in iron ore prices after two days of equally enormous declines.
“Yesterday’s stronger than expected Chinese manufacturing PMI in November supported the lift in iron ore future prices and underpinned AUD,” said Elias Haddad, senior currency strategist at the Commonwealth Bank.
However, the Aussie’s gains were kept in check by the release of further tepid domestic economic data earlier in the session, adding to the risk of a negative growth quarter being recorded when Australia’s GDP report is released on Wednesday next week.
Here’s the scoreboard as at 8.05am AEDT:
- AUD/USD 0.7420 , 0.0038 , 0.51%
- AUD/JPY 84.59 , 0.11 , 0.13%
- AUD/CNH 5.1039 , 0 , 0.00%
- AUD/EUR 0.6956 , -0.0015 , -0.22%
- AUD/GBP 0.5891 , -0.0011 , -0.19%
- AUD/NZD 1.0458 , 0.0039 , 0.37%
Turning to Asian trade on Friday, there’s little on the economic data that looks set to move the Aussie sharply one way or another.
Domestically, the ABS will release Australia’s retail sales report for October at 11.30am AEDT. While a first-tier release, it’s lost its impetus to move the Aussie meaningfully in recent years, something that Haddad believes will remain the case today.
“Today’s Australia’s October retail sales report is unlikely to have a material impact on AUD,” he says.
“We expect retail sales to increase by 0.2% after the large 0.6% rise the previous month which was driven by higher food prices.”
That’s about it for major economic events in Asia on Friday, something that will likely see market activity slow to a crawl in the second half of the session ahead of the release of US non-farm payrolls for November at 12.30am AEDT on Saturday.
Markets expect payrolls to increase by 180,000 with the unemployment rate tipped to hold steady at 4.9%. Average hourly earning, perhaps of more importance given its implications for inflationary pressures, are expected to have increased by 2.8% over the year, unchanged from the level seen in October.