It was another lacklustre session for Australian dollar on Wednesday, oscillating in a thin range throughout the trading session.
Here’s the scoreboard as at 7.25am AEST.
- AUD/USD 0.7568 , 0.0002 , 0.03%
- AUD/JPY 83.8 , 0.06 , 0.07%
- AUD/CNH 5.2081 , 0.0012 , 0.02%
- AUD/EUR 0.7098 , 0.0003 , 0.04%
- AUD/GBP 0.6064 , 0.0004 , 0.07%
- AUD/NZD 1.0861 , 0 , 0.00%
And here’s the AUD/USD 5-minute chart showing the sideways price action seen during the session.
Yes, not exactly exciting price action, trading in a 30 pip range over the session.
And that was despite the release of a strong US ADP National Employment Report, revealing that private sector payrolls increased by 263,000 in March and the release of the minutes of the US Federal Reserve’s FOMC March meeting in which members discussed reducing the size of the bank’s balance sheet, likely beginning before the end of this year, and concern over recent strength in US stocks.
They certainly impacted other asset classes, but not the Australian dollar.
Elias Haddad, senior currency strategist at the Commonwealth Bank, said that reaction may have been due to minutes indicating that the Fed may be prepared to look through period of higher-than-target inflation without automatically raising interest rates.
“USD pared back most of its overnight gains because this morning’s FOMC March meeting minutes suggested that brief periods where US inflation overshoots the Fed’s 2% target may not trigger faster rate hikes,” he said.
“According to the minutes ‘a few members expressed the view that the Committee should avoid policy actions or communications that might be interpreted as suggesting that the Committee’s 2% objective was actually a ceiling’.”
Turning to Thursday trade in Asia, there’s yet again little on the economic radar that appears likely to generate volatility in the Aussie.
Guy Debelle, deputy governor of the RBA, will speak on “‘Recent Trends in Australian Capital Flows” at the 2017 AFR Banking and Wealth Summit in Sydney from 8.40am AEST.
There’s always the ability for him to surprise, but we’ve already heard a lot from the RBA this week.
Regionally, there may be passing interest in services PMI reports released in China and India.
Later in the session, markets will receive German industrial orders along weekly jobless claims in the US.
The Reserve Bank of India will also announce its April monetary policy meeting.
Given the quiet economic calendar, most interest is likely to fall on the start of the two-day meeting between US president Donald Trump and Chinese Xi Jinping later in the session.
Many will also be eyeing off the release of the US non-farm payrolls report for March that will be released on Friday.