The Australian dollar is going nowhere

TORSTEN BLACKWOOD / AFP / Getty Images

The Australian dollar is going nowhere fast, rising, then falling, before closing Tuesday’s session close to flat.

Here’s the scoreboard just before 7am AEST:

AUD/USD 0.7910 , -0.0001 , -0.01%
AUD/JPY 87.27 , -0.32 , -0.37%
AUD/CNH 5.3077 , -0.0155 , -0.29%
AUD/EUR 0.6729 , 0.0024 , 0.36%
AUD/GBP 0.6086 , 0.0018 , 0.30%
AUD/NZD 1.0790 , 0.0053 , 0.49%
AUD/CAD 1.0018 , -0.0014 , -0.14%

After rallying on the back of another strong Australian business confidence reading earlier in the session, the Aussie ran into selling pressure following the release of strong US labour market data in early North American trade, briefly dipping beneath the US 79 cent level before rebounding into the close.

“USD recovered early during the New York trading session on further evidence of diminishing US labour market slack,” said Elias Haddad, senior currency strategist at the Commonwealth Bank.

“According to the US Labour Department, job openings rose by 4% in June, well above consensus expectations of 1.5%. Importantly, this is the fastest monthly pace of job openings growth in over a year and above the 12-month average monthly growth rate prior to the 2007 recession.”

Haddad said the view that US labour market conditions are tightening was further reinforced by the release of the latest NFIB small business optimism survey which revealed hiring plans increased last month to the highest level since November 2006.

The Aussie was also hindered by the release of a disappointing Chinese trade report for July, along with renewed geopolitical tensions between the US and North Korea and a slide in Chinese iron ore futures.

However, as seen in the 5-minute chart below, the AUD/USD remains well supported on even the smallest of dips at present.

AUD/USD 5-Minute Chart

Turning to Wednesday trade in Asia, there’s once again a smattering of economic data releases scheduled, although none appears likely to move the Aussie significantly one way or another.

In Australia, Christopher Kent, assistant governor of financial markets at the Reserve Bank of Australia, will speak at 8am AEST at a Bloomberg Conference in Sydney. The title of his speech is unknown, although it’s debatable whether he’ll be able to add much to the discussion on the outlook for monetary policy given the raft of RBA commentary that we’ve seen in the past few weeks.

On the data front, the latest Westpac-MI consumer sentiment survey for August will be released at 10.30am AEST. That will be followed by updated housing finance data for June from the ABS one hour later at 11.30am AEST.

If recent evidence is anything to go by, these event will come and go without causing even the slightest flutter in the Aussie.

On the regional front, Chinese consumer and producer price inflation figures for July will also be released at 11.30am AEST. Keeping with the recent theme, producer prices are likely to have grown significantly faster than consumer prices over the past 12 months.

This release used to move markets, but it has lost its market-moving clout over recent years.

Later in the session, the highlights include US productivity and labour costs data for the June quarter while in Canada housing starts and building permits data will also be released.

The US EIA will also release weekly crude inventory data at 12.30am AEST Thursday morning.

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