Bell FX Currency Outlook: The Aussie Dollar hits a lower note after the US Federal Reserve December Policy meeting minutes and the release of some good US employment data.
Australia: The AUD fell below 0.8900 after the FOMC Minutes, having lost ground earlier in the night. It sits at a similar level to yesterday morning, and key support for the AUD/USD remains in the 0.8820-0.8840 window that marked the lows in August and December.
Today, retail sales and building approvals data for November is published at 11:30AEDT. It is expected that retail sales have increased in November, after a run of solid growth in prior months.
While there is now evidence of a pick-up in spending at domestic retailers, due in part to the lower AUD. Note also that as of today's release the ABS will include a monthly online retail sales estimate. Market also expects building approvals to increase.
Majors: The USD was once again the focus overnight after the stronger than expected ADP national employment report numbers, driving the US
10-year yield back to 3%, though late in the session the FOMC minutes, which revealed little new, saw the USD pare some of its gains. Better data
elsewhere in the core, most notably strong European retail sales were not enough to offset the USD strength, but the trend of stronger core data
against a weaker periphery continues.
GBP once again out-performed ahead of the Bank of England meeting this evening. The FOMC Minutes from the December meeting showed a less than unanimous decision to cut monthly bond purchases by $10bn.
'While 'most' members agreed that the labour market improvement in 2013 and the likelihood that it would be sustained meant that tapering could begin (indeed, some members voted for a larger reduction), other members wanted QE to remain unchanged due to the slack that still remained in the labour market and low inflation.
The EUR trended lower overnight, a natural casualty of USD strength, despite some strong Eurozone retail sales data for November (1.6%y/y vs.
0.3% expected). German factory orders also beat expectations (2.1% vs 1.5% expected), while the unemployment rate remained at 12.1%.
09 JAN AU Retail Sales MoM
AU Building Approvals MoM
UK Trade Balance
US Initial Jobless Claims
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