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Lacklustre inflation data forces Greenback lower

By Matt Richardson

The Australian Dollar is stronger this morning when valued against the Greenback. During yesterday’s Asian session the Aussie fell to an intraday low of 0.7871. Overnight during the US session the Aussie recovered some of its earlier losses on the back of weak US inflation and housing data, reaching an overnight high of 0.7950. The AUD/USD pair has a major resistance at 0.7965. Looking ahead today on the local data front AIG Manufacturing Index (PMI) for August will be released at 9.30am AEST followed by CoreLogic’s monthly House Price Index, also for August at 10.00am AEST. In the US tonight all eyes will be on the release of US non-farm payrolls for the month of August with market expectations of an increase in payrolls of 180,000, leaving the unemployment rate steady at 4.3%. 

The New Zealand Dollar is weaker across the board after the ANZ business outlook survey showed weaker inflation indicators. The NZD/USD fell to a 24-hour low of 0.7131 after the announcement. The Kiwi dollar has seen a steadily fall this month, and it is on track to end about 4.5 per cent down in August against the USD. Fairly quiet on the data front today with the only release of quarterly Overseas Trade Index. The New Zealand dollar is notably weaker versus when valued against both the Euro at a rate of 0.6026 and the Australian dollar 1.1062. 

The Great British Pound grinded through another lifeless session on Thursday, mulling between a low of 1.2851 and a high of 1.2935 when valued against its US Counterpart. Whilst the UK economic calendar provided no spark, third round Brexit negotiations ended in Brussels with both sides maintaining a fair degree of distance on points of real contention. Having only a limited impact on the Sterling this week, the ongoing break-down in the talks between Britain and the UK remain the greatest source of uncertainty for the Great British Pound. Opening 0.1 percent stronger, the Sterling currently swaps hands at a rate of 1.2929

The U.S Dollar edged broadly lower through trade on Thursday following a dearth of lacklustre macroeconomic data. Attentions were acutely turned to the Fed’s preferred inflation measure, the PCE index, and an uninspiring print dampened expectations of a revival in price pressures and heightened likelihood of a December rate hike. The poor read when coupled with softer than anticipated consumer spending and pending home sales forced the worlds base currency lower when values against most G10 counterparts. Falling below 110 JPY the USD gave up 1.19 against the Euro and saw the 19 nation combined unit claim intraday highs at 1.1925 following a small uptick in year on year inflation. As attentions shift to this evening’s non-farm payroll numbers for direction into the weekend investors will be looking ahead to next week’s ECB policy meeting with expectations for updated guidance and a planned approach to QE tapering firmly in their sights.