The Australian dollar is ambling along as traders eye bigger events ahead

Photo by James D. Morgan/Getty Images

The Australian dollar ambled its way through Wednesday’s trading session, finishing mixed against the crosses but flat against the US dollar.

Here’s the scoreboard just before 7am AEST.

AUD/USD 0.7966 , -0.0001 , -0.01%
AUD/JPY 88.21 , 0.29 , 0.33%
AUD/CNH 5.3596 , -0.0011 , -0.02%
AUD/EUR 0.6718 , -0.0033 , -0.49%
AUD/GBP 0.6022 , -0.001 , -0.17%
AUD/NZD 1.0716 , 0.0049 , 0.46%
AUD/CAD 1.0013 , 0.0024 , 0.24%

The largest moves in the Aussie came against the New Zealand dollar and euro, albeit in different directions.

The Kiwi dollar was under pressure for most of the trading session following the release of a soft labour market report for the June quarter earlier in the session.

The euro, in comparison, outperformed, rallying to above 1.19 against the US dollar for the first time in over two years. That was largely as a result of renewed US dollar weakness, something that was driven by a combination of factors, said Westpac’s currency strategy team.

“No single news item drove the USD lower though earlier news certainly made for an unhelpful background to the day’s trading, including Trump talking down the USD in a WSJ interview and threats of US measures to restrict trade with China,” it said.

It also said that commentary from US Federal Reserve members overnight was “mixed” with James Bullard, St Louis Fed president, calling the need for one more rate hike this year as “inappropriate” while Loretta Mester, Cleveland Fed president, said further hikes will be needed.

The wash up was that the US dollar weakened against both the euro and pound.

However, that didn’t translate through to strength in the Aussie beyond a short-term blip higher, perhaps as a consequence that Australia would unlikely benefit from a trade war between the US and China.

AUD/USD 5-Minute Chart

Turning to Thursday’s trading, there’s plenty of economic data set to be released although its questionable whether it’ll have much impact on the Australian dollar before the release of the RBA’s quarterly Statement on Monetary Policy and US non-farm payrolls report on Friday.

On the domestic data docket, traders will receive the latest Performance of Services Indicator from the Ai Group at 9.30am AEST while Australian trade figures for June will be release two hours later at 11.30am AEST.

It’s the latter that will receive most attention with the trade surplus expected to narrow to $1.8 billion from $2.47 billion in May.

From a regional perspective, services PMI reports from China and Japan will also be released.

Later in the session, the main event will come from the UK with the Bank of England set to announce its August monetary policy decision.

“While no change in the official bank rate is almost unanimously expected, today’s meeting also comes with a new set of forecasts and the outlook on inflation should be an important guide on what to expect in terms of future policy settings,” said Rodrigo Catril, currency strategist at the National Australia Bank.

That event will arrive at 9pm AEST.

Elsewhere traders will receive a raft of services PMI reports from the US, UK and Europe, along with eurozone retail sales.

The US ISM non-manufacturing report may garner a reaction from markets, especially if the employment subindex offers up a surprise ahead of July’s non-farm payrolls report tomorrow.

Other releases in the US include weekly jobless claims, factory orders, Challenger Layoffs and revised durable goods orders for June.

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