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Aussie dollar expected to remain steady ahead of jobs report

By Brett Ottawa

The Australian Dollar remained range bound over the past 24 hours, finding support at 78.20 US Cents.  The MI Leading Index, which measures nine economic indicators saw a slight increase to 0.1%. Little movement was seen for the Aussie though following the result, nor for the rest of the domestic session. Iron Ore futures took a bashing overnight falling by 3-4% overnight, with the AUD/USD following suit after dropping from intraday highs of 0.7858. Investors look to the release of Chinese GDP and Industrial Production figures released at 1pm along with September jobs this morning whereby it is expected another 15,000 jobs were added to the Australian economy. We open today at 0.7845.

The New Zealand Dollar is weaker when valued against the worlds reserve currency, falling to a low of 0.7119 overnight. The main catalyst and still weighing on the Kiwi was Tuesday nights soft dairy auction and a report of an overall six-month low. Further weakness in the Kiwi is being driven by market participants on tenterhooks as they eagerly await the announcement on local government. Will Bill English from the National Party or Jacinda Arden from Labour be the next leader to run the country? We are expecting New Zealand’s First leader Winston Peters to reveal which party he will enter into a governing coalition this afternoon, expect to see some short-term volatility. NZD/USD currently changing hands at 0.7152.

The Great British Pound edged marginally lower through trade on Wednesday following a lackluster labour market print wherein wage growth remained stubbornly soft. Average earnings, while edging higher, continued to lag behind inflation in August as wage growth struggles to keep pace with price pressures fueled by the currencies broader weakness. Touching intraday lows at 1.3143 Sterling struggled to break topside resistance at 1.32 as investors re position long term monetary policy expectations. While a large portion of analyst are pricing in a November interest rate hike, comments from BoE Governor Mark Carney were re-affirmed with Wednesday’s soft print and it remains unlikely that consumer lead growth will flourish while wages remain depressed. Attentions now turn to today’s retail sales print. A soft read would only consolidate the flatness in wage growth and could force Cable back below support at 1.3120.    

The Greenback is slightly weaker this morning when valued against most of its counterparts as the US Dollar's rally got interrupted by softer-than-expected September housing data. The 4.7 percent decline in September was well below forecast of -0.4 percent. The media was quick to blame the hurricanes. The Dow closed above 23,000 overnight offsetting the US dollar's short-term losses. All attentions now turn now to the release of the Philadelphia Federal Reserve Manufacturing Index a leading indicator of economic health. The greenback is currently trading at 1.1790 against the Euro and 1.3200 against the British Pound.