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Australian Dollar breaches 78 U.S. cents
By JOEL HOLMES
Australian Dollar
AUD / USD
Expected Range
0.7740 – 0.7850
The Australian dollar moved lower through trade on Thursday, forced below 0.78 U.S cents following softer than anticipated retail sales growth. Consumers tightened their purse strings through August marking a second consecutive monthly depreciation in consumer led spending. The soft read dampens hawkish investors calls for the RBA to increase interest rates and supports the Central Bank’s decision Tuesday to maintain a neutral policy stance throughout the remainder of 2017. Having touched intraday highs at 0.7866 the AUD fell sharply as markets looked to compare the paths of monetary policy. With the U.S Federal Reserve expected to raise rates in December the USD has begun to claw back some of July’s losses, limiting AUD upside in the short term and opening the door for further downside with support forming at 0.7730. Attentions now turn to key wage growth and non-farm payroll prints this evening as the primary drivers into the weekly close.
New Zealand Dollar
NZD / USD
Expected Range
0.7080 – 0.7160
Great British Pound
GBP / AUD
Expected Range
1.6700 – 1.6950
Majors
USD, EUR, JPY
Expected Range
N/A
It was a day for the US Dollar, regaining momentum after unemployment claims beat expectations for the month of September. With the continuation of upbeat data, the dollar continues to be driven by the likelihood of a December interest rate rise by the Federal Reserve, with markets currently pricing an 87% chance of a 25bps hike. The U.S. Dollar Index (DXY) saw gains of 0.5% with major equities gaining between 0.5-0.7% and hitting new highs. EUR/USD declined from intraday highs of 1.1770 to test the handle at 1.17 as continued political tensions in the Catalan region of Spain continue to put pressure on the common currency. The release of ECB minutes showed the central bank remained positive on the possibility of tapering QE next year but are only in preliminary discussions with rates to remain at record lows. Investors look to Fridays release of Non-Farm Payrolls and Unemployment rate this evening.