The Australian dollar is looking rock solid, and not just against the greenback

Photo by Michael Dodge/Getty Images

The Australian dollar is looking rock solid in early Asian trade on Friday, continuing to benefit from data released on Thursday which revealed that Australian recorded its largest trade surplus on record in December.

First, here’s the Australian dollar scoreboard:

  • AUD/USD 0.7655 , 0.0073 , 0.96%
  • AUD/JPY 86.25 , 0.38 , 0.44%
  • AUD/CNH 5.2140 , 0.0374 , 0.72%
  • AUD/EUR 0.7115 , 0.0075 , 1.07%
  • AUD/GBP 0.6108 , 0.0118 , 1.97%
  • AUD/NZD 1.0504 , 0.0091 , 0.87%

At .7655, the AUD/USD currently trades at the highest level seen since November 11 last year, extending its gain in 2017 to 6%.

AUD/USD Daily Chart

It’s also threatening to break higher against the euro, sitting just below the multi year high of .7128 struck in mid-January. Any move above this figure will leave the Aussie at the highest level against the euro since June 2015.

AUD/EUR Weekly Chart

Whether or not the Aussie can continue its ascent today will almost certainly be determined by the release of US non-farm payrolls for January later in the session.

Markets expect payrolls to increase by 175,000, up from 156,000 in December, leaving the unemployment rate unchanged at 4.7%. Given the continued focus on inflationary pressures, there’ll also be plenty of interest on average hourly earning growth and the underemployment rate.

Average weekly earnings are tipped to increase 0.3%, down from 0.4% previously. The underemployment rate in December came in at 9.2%, having fallen from a peak of 17.1% in April 2010.

Before the payrolls report is released at 12.30am AEDT, markets will also receive a swathe of services PMI reports for January, including from Australia, Japan, India, Europe and the US.

Even with the release of the payrolls report, the US ISM non-manufacturing PMI will likely prove to be influential given it is a barometer of business activity in what is by far the largest component within the US economy. It’ll be released at 2am AEDT.

With Chinese markets resuming from Lunar New Year celebrations, the latest Caixin-Markit manufacturing PMI for January will also be released at 12.45pm AEDT.

Elswehere, CPI from Italy, retail sales from the eurozone along with factory orders from the US will also be released.

Charles Evans, Chicago Fed president and voting member on the FOMC this year, is also scheduled to speak with his remarks likely to be watched closely following the FOMC’s policy decision earlier in the week.

It’ll essentially be a busy Friday session with the crescendo coming at the end.

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