The Australian dollar has drifted back above 74 cents

Photo by Amory Ross/Team Alvimedica/Volvo Ocean Race via Getty Images

The Australian drifted higher overnight, continuing the now well-worn pattern whenever trading volumes slow.

It was US Thanksgiving overnight.

First, here’s the scoreboard as at 7.55am AEDT:

  • AUD/USD 0.7404 , 0.002 , 0.27%
  • AUD/JPY 83.92 , 0.91 , 1.10%
  • AUD/CNH 5.1442 , 0.013 , 0.25%
  • AUD/EUR 0.7009 , 0.0018 , 0.26%
  • AUD/GBP 0.5947 , 0.0015 , 0.25%
  • AUD/NZD 1.0574 , 0.0058 , 0.55%

While at the margin you could argue that higher commodity prices helped to push the Aussie higher, it’s more likely that modest gains in European stocks, fuelled by weak volumes, was the major driving force.

Commodity markets were already soaring in Asian trade and all of the move higher in the AUD/USD occurred at the start of European trade, adding to this view.

Turning to Asian trade on Friday, there’s nothing on the Australian data calendar to speak of, suggesting that any movements in the Aussie will be driven by offshore factors.

If there’s one event that could generate a move in the Aussie, it’s the release of Japanese consumer price inflation data at 10.30am AEDT, says Rodrigo Catril, currency strategist at the NAB.

“The market is looking for a pick-up in the year on year core-core number (ex-fresh food and energy) from 0.0% to 0.1%,” he says.

“The decline in oil prices over a year ago are essentially dropping out of the equation and the Tokyo CPI (ex- fresh food and energy) for October, which was released a month ago and tends to be a leading indicator, also supports the view for a small uptick.”

That release could influence movements in the Japanese yen, hence the broader US dollar index.

Aside from economic data, the Chinese yuan fix from the People’s Bank of China — scheduled at 12.15pm AEDT — could also generate some movement.

Later in the session there’s a few data releases scheduled in Europe and the US but nothing that appears likely to generate significant volatility in the Aussie.

If there’s going to be any movement to speak of, it’ll likely come from the release of international trade and “flash” services PMI from the US.

AUD/USD 5-Minute Chart

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