The Australian dollar is flying

Scott Olson/Getty Images

Buoyed by a 6% surge in the crude oil price, strength in US equities and dovish minutes from the US Federal Reserve’s latest policy meeting, the Australian dollar ripped higher overnight, rallying by 1% from Wednesday’s opening level.

At 8am AEDT, the AUD/USD bought .7177, up 0.97% for the session.

AUD/USD 5-minute chart

According to Elias Haddad, FX strategist at the CBA, the gains seen overnight may extend into Thursday’s trading session.

“AUD/USD rallied by roughly 1.3% during the overnight session, in-line with the higher commodity prices and European/US equity markets,” said Haddad in his morning note. “We expect AUD to remain supported today on an encouraging Australia January labour force report. Employment growth in Australia was very strong in late 2015, and the ABS has flagged that positive sample rotation issues are likely once again in January.”

The January labour force report will be released at 11.30am AEDT, with economists tipping an increase in employment of 13,000. Unemployment it forecast to remain steady at 5.8%.

Outside of the Australian jobs report, Chinese consumer and producer price inflation figures for January will be released at 12.30pm. While still an important release, its significance to financial markets has diminished in recent years, meaning the impact on markets, including the Aussie, is likely to be negligible.

Data releases aside, the movements in Chinese stocks and the offshore traded yuan, or USD/CNH, are also likely to be influential.

Here’s the current Aussie dollar scoreboard.

  • AUD/USD 0.7177 , 0.0069 , 0.97%
  • AUD/JPY 81.72 , 0.63 , 0.78%
  • AUD/CNH 4.6834 , 0.0508 , 1.10%
  • AUD/EUR 0.6447 , 0.0069 , 1.08%
  • AUD/GBP 0.5022 , 0.0053 , 1.07%
  • AUD/NZD 1.0814 , 0.0018 , 0.17%

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