The Australian dollar continued to sink in overnight trade, pressured by higher US bond yields and further weakness in commodity markets.
Here’s the scoreboard as at 7.50am AEDT.
- AUD/USD 0.7503 , -0.0023 , -0.31%
- AUD/JPY 86.23 , 0.18 , 0.21%
- AUD/CNH 5.1771 , -0.0277 , -0.53%
- AUD/EUR 0.7086 , -0.0052 , -0.73%
- AUD/GBP 0.6162 , -0.0021 , -0.34%
- AUD/NZD 1.0871 , -0.0009 , -0.08%
The AUD/USD is currently clinging onto .7500, having briefly slipped to as low as .7492 during the session on the back of further commodity price weakness.
“Commodities — and not just oil — have remained under pressure,” said Rodrigo Catril, currency strategist at the National Australia Bank.
“20 days ago iron ore was close to $95 now is at $86.8, oil was at $54.5 and now is at 48.96.and copper is also down almost 8% from its mid-February peak.”
The Aussie was also undermined by a lift in US treasury yields with the benchmark 10-year rate briefly rising above 2.6% during the session.
It also lost ground against the euro, thanks largely to remarks from ECB president Mario Draghi following the bank’s March policy meeting. The remarks were deemed to be more hawkish than what many had been expecting.
Turning to Friday trade in Asia, the focus is likely to be on one thing and one thing only — the release February’s US non-farm payrolls report at 12.30am AEDT.
Markets expect payrolls to increase by 200,000, leaving the unemployment rate slightly lower at 4.7%. Perhaps of more importance in terms of the outlook for US interest rates, average weekly earnings are tipped to increase 0.3% following a 0.1% gain in January. That would leave the annual increase at 2.7% without revisions to prior data.
This primer from our New York team has further details.
Before the payrolls report drops, there’s little on the economic calendar in Asia or Europe that appears likely to generate excitement among traders.
In Australia, the ABS will release updated housing finance figures for January at 11.30am AEDT, with most attention yet again likely to be on the split between owner-occupier and investor lending.
Regionally, the Bank of Korea will announced its March monetary policy decision. No change expected.
In Europe, German trade figures will be released along with industrial production and trade data from the UK.
Given the relative dearth of market-moving data ahead of the payrolls report, trade is likely to be quiet throughout today’s Asian session.