The Australian dollar is under pressure

Jeff J Mitchell/Getty Images

The Australian dollar remains under pressure, falling to as low as .7542 in overnight trade before recovering into the close.

Here’s the scoreboard as at 7.35am AEST.

  • AUD/USD 0.7560 , -0.0003 , -0.04%
  • AUD/JPY 83.69 , -0.05 , -0.06%
  • AUD/CNH 5.1976 , -0.0045 , -0.09%
  • AUD/EUR 0.7081 , -0.0004 , -0.06%
  • AUD/GBP 0.6074 , -0.0005 , -0.08%
  • AUD/NZD 1.0837 , -0.0006 , -0.06%

The Aussie is struggling to find traction following the release of the Reserve Bank of Australia’s (RBA) April monetary policy on Tuesday afternoon.

Markets perceived the tone of the statement to be far less optimistic on the outlook for the Australian economy than that communicated previously, particularly in relation to the labour market.

“The RBA noted that ‘some indicators in the labour market have softened recently’,” said Elias Haddad, senior currency strategist at the Commonwealth Bank. “In its previous statement, the RBA highlighted that labour market indicators were mixed.”

That weighed on the Aussie, briefly seeing it fall below its 200-day moving average before it found renewed buying support. Improved investor sentiment and a rebound in industrial metals prices, along with technical buying, have, for the moment, kept the Aussie’s losses in check.

AUD/USD Daily Chart

After a busy start to the week, the economic data calendar quietens slightly today with no major data releases scheduled in Australia or Asia.

The highlight will be the release of Australia’s Performance of Services Index (PSI) for March at 9.30am AEST, a report that looks at activity levels across the nation’s services sector. While the largest and most important sector in the Australian economy, it’s unlikely to garner much attention from traders.

Given the relative dearth of market moving events, the Aussie will likely take its cues from movements in Chinese financial markets, particularly commodity futures, along with movements in the USD/JPY which tend to be influential on the US dollar index on quiet trading days in Asia.

Later in the session, markets will also receive services PMI reports from Europe, the UK and US.

Ahead of Friday’s US non-farm payrolls report, there’ll also be plenty of attention on the release of the ADP National Employment for March. It’s a fairly reliable indicator of what the payrolls report will deliver, at least in terms of jobs growth.

An increase of 190,000 is expected. Given recent strength in soft labour market indicators, it wouldn’t surprise if markets are looking for an even higher increase than what economists currently looking for.

The US Federal Reserve will also release the minutes of its March 14-15 FOMC meeting where it raised the Fed funds rate by 25 basis points.

While there is always the potential for surprise, markets have heard from many Fed members since the March meeting was held.

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