The Australian dollar rally has run out of puff

Photo: Ezra Shaw/Getty

After jumping back above the 77 cent level on Thursday, and logging its largest gain in nearly two years in the process, the Australian dollar continued to weaken overnight following the release of Australia’s weak jobs report for February earlier in the session.

As the early scoreboard reveals, the Aussie succumbed to profit-taking against all major pairs apart from the New Zealand dollar.

  • AUD/USD 0.7677 , -0.003 , -0.39%
  • AUD/JPY 86.94 , -0.42 , -0.48%
  • AUD/CNH 5.2737 , -0.0033 , -0.06%
  • AUD/EUR 0.7129 , -0.0049 , -0.68%
  • AUD/GBP 0.6213 , -0.0056 , -0.89%
  • AUD/NZD 1.0978 , 0.0041 , 0.37%

The Aussie lost ground against the euro thanks to the risk-friendly Dutch election result and hawkish remarks from Ewald Nowotny, a ECB council member, to the German publication Handelsblatt in which he discussed ways the ECB could use to remove monetary policy accommodation.

It was also soggy against the British pound as Kirsten Forbes, a member of the Bank of England’s monetary policy committee, voted to hike interest rates at the conclusion of the bank’s March monetary policy meeting.

Throw in the weak Australian jobs report for February earlier in the session, and a pullback in Chinese iron ore futures overnight, and it was enough to keep the Aussie under pressure.

AUD/USD 5-Minute Chart

After a whirlwind trading session on Thursday, the economic data calendar lightens up substantially today, laying the platform for a quiet period of trade.

In Asia, China will release updated property price data for February, with another year-on-year moderation in price growth expected.

Singaporean non-oil exports, seen by some as a gauge on global trade activity, will also be released.

Later in the session, eurozone trade figures, along with US industrial production and the latest read of the University of Michigan consumer confidence survey, are the only figures that carry the potential to create volatility across markets.

The G20 will also meet over the weekend.

While these events usually carry little significance for financial markets, Rodrigo Catril, currency strategist at the National Australia Bank, says this gathering of global leaders may create more interest than most.

“Usually G20 finance ministers and central bank chiefs summits are not that exciting, but given the US threat of protectionism and accusation of currency manipulation this time around the gathering could be more relevant for markets as it might provide some hints on what to expect in terms of US trade policy and a US border tax adjustment in particular,” he says.

US president Donald Trump and German chancellor Angela Merkel will also hold a joint press conference that will arrive at 4:00am AEDT tomorrow.

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