The Australian dollar rally is showing few signs of slowing down, continuing to advance against all major crosses on Wednesday.
Just take a look at the scoreboard as at 7am AEDT — performing like a boss.
AUD/USD 0.7954 , 0.0039 , 0.49%
AUD/JPY 89.01 , 0.31 , 0.35%
AUD/CNH 5.3759 , 0.035 , 0.66%
AUD/EUR 0.6906 , 0.0057 , 0.83%
AUD/GBP 0.6106 , 0.0037 , 0.61%
AUD/NZD 1.0807 , 0.0041 , 0.38%
AUD/CAD 1.0019 , 0.0029 , 0.29%
The Aussie continued to benefit from speculation that the RBA may begin to lift interest rates next year, along with continued strength in commodities such as iron ore and crude oil.
Some profit-taking ahead of tonight’s European Central Bank (ECB) monetary policy meeting helps explain why the Aussie outperformed against the euro for the session.
The Aussie also continued to grind higher against the greenback, closing at the highest level since mid-May 2015 overnight. As the hourly chart shows below, the AUD/USD is now within touching distance of 80 US cents.
Whether or not the Aussie can get reach that level will almost certainly be determined by the release of Australia’s June jobs report, due out today at 11.30am AEST.
Economists are forecasting an increase in employment of 15,000 with the unemployment rate tipped to increase to 5.6%. This 10-second guide has further information on what to expect, along with what parts of the report will likely move the Aussie dollar.
If there’s been a trend this year, it’s been that the jobs data has almost always topped expectations.
Following the release of Australia’s jobs data, the Bank of Japan (BoJ) will also release its July monetary policy decision, including updated forecasts. No one expects that policy will change, although there is some speculation that the bank may push back the expected timing of hitting its inflation target (or even abandon it) and lift its assessment for the Japanese economy.
There is no set time for the decision, although it tends to be released around 1pm AEST if there’s been no change to policy settings.
Later in the session, markets will receive their second dose of central bank action with the ECB also announcing its July monetary policy decision.
No change in interest rates is expected, although there is some uncertainty about the outlook for the bank’s asset purchase program.
“The market is split on whether the governing council will signal that it no longer has a bias to extend the quantum or duration of its current €60 billion per month QE programme, a prelude to signalling in September than it intends to start tapering its QE buying from early 2018,” said Ray Attrill, head of FX strategy at the National Australia Bank.
“If it does — and we think it will — expect some further strengthening in the euro, however innocuous this change might seem.”
The ECB rate decision will arrive at 9.45pm AEST. ECB president Mario will then hold his usual press conference at 11.30pm AEST.
Interspersed around the ECB decision, there’ll also be a plethora of economic data released both in Europe and the US.
The highlights include UK retail sales along with the Philadelphia Fed manufacturing survey and weekly jobless claims data from the US.