The Australian Dollar reversed Thursday’s gains against the Pound, Euro and US Dollar after positive data out the UK sent Sterling higher and as investors await the release of US jobs data.
The ‘Aussie’ initially softened away from the three-week high it attained in Thursdays session as investor attention turned to the release of jobs data out of the United States which is forecast to show improvement.
Early in the session the ‘Aussie’ briefly ticked higher against several peers including the Pound and Euro as the Reserve Bank of Australia raised its economic growth and inflation forecasts. The RBA said in its quarterly monetary policy statement that “over the past few months, there have been further signs that very stimulatory monetary policy is working to support economic activity.”
“The Aussie did actually rise initially after the RBA announcement but then it came off. I think it’s because of the general volatility in the market ahead of the payrolls figure due later in the United States,” said a currency strategist from Royal Bank of Scotland.
The Pound was mixed against the majority of its peers but rose against the Australian Dollar despite Industrial Production and manufacturing production data coming in below expectations.
According to the Office for National Statistics, industrial and manufacturing production rose less than economists had been forecasting in December, raising concerns that the UK economic recovery slowed at the end of 2013.
The Pound did find support however from a separate which showed that the UK’s trade deficit narrowed to £1 billion, the sharpest narrowing since records began in 1998. The narrowing comes following an increase in exports to the European Union.
All eyes will now be focused on this afternoons US non-farm payrolls data which is expected to come in positively. If the data comes in strongly as forecast than we can expect the ‘Aussie’ to soften as investors raise their expectations for the Federal Reserve to end its monetary easing programme this year.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8943 ,
Australian Dollar,, Pound Sterling,0.5474 ,
Australian Dollar,,Euro,0.6588 ,
Australian Dollar,,New Zealand Dollar,1.0852 ,
Pound Sterling,,Australian Dollar,1.8273 ,
US Dollar,,Australian Zealand Dollar,1.1180 ,
Euro,,Australian Dollar,1.5172 ,
[/table]
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