Australian Dollar Outlook - February 6, 2014
By Christine Gaylican | February 6, 2014 3:00 PM EST
Bell FX Currency Outlook: The Australian Dollar has opened firmer this morning having consolidated above the 0.8900 level.
Australia: Last night the Australian Dollar rose back above USD 0.8900. The rally was the result of weaker than expected Market Services PMI
data out of Germany (the Eurozone's largest economy) as well as the UK.
ECB’s Benoit Cœure says that if necessary the central bank could cut rates further (Reuters).
John Edwards, an external board member of the RBA, commented in an interview that the depreciation in the AUD "has been pretty marked, and
it's not necessarily over," and also "there is a risk the currency is going to fall further."
Mr. Edwards is part of the nine-member board of the central bank and his views help form its monthly rate decision.
In Australia today, retail sales and trade data for December will be released at 11:30 AEST. Retail sales are expected to have increased further in December, finishing the year with a run of strong numbers while for international trade, expectations are the trade deficit will have widened sharply in December. The key event for markets tonight will be the ECB policy meeting.
Majors: In the US, equities fluctuated following mixed data. January ADP employment reported that 175k jobs were created, below the expect 185k
and down from 227k in December, and non-manufacturing ISM rose to 54, up from a previous figure of 53 and above expectations of 53.7.
European equities rebounded to finish flat as the ISM data changed the tone of the session. It was a relatively quiet night for most currency markets.
The GBP gained ground after initial losses, the EUR is slightly stronger against the greenback, and the yen slightly weaker. As stated above, the ECB policy meeting is the key event for markets tonight and in what is likely to be a tight call, expectations are that the ECB will leave policy unchanged and Draghi likely to reiterate the ECB stands ready to act.
06 FEB AU Retail Sales MoM
UK Bank of England Bank Rate
US Initial Jobless claims
For latest pricing, ranges visit www.bellpotter.com.au
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