The Aussie Dollar has not been immune to the effects of the US Dollar’s spike lower and subsequent recovery overnight. AUD/USD slipped to USD0.7940 in the New York morning on Tuesday before recovering around 25 pips to close at 0.7965. During the Sydney morning session today, however, the pair jumped to a high of 0.7993; the highest since September 20th before falling almost half a cent during the rest of the Asia shift to be barely 10 pips above Tuesday’s low of 0.7939.
Certainly, some of the gloss has been taken off precious metals and other industrial commodities. As we write, gold is than $10 off its recent $1343 peak but silver yesterday was down 1.3% and palladium lost just over 3%. Elsewhere, base metals were all lower with losses extended to as much as 2.9% for nickel. Copper dropped 2.2% to $7,054 on the London Metal Exchange Tuesday; the biggest drop since December 5th. The metal rose 7.2% in December, capping the biggest annual gain in eight years, but prices are down 2.6% so far in 2018.
The big number to watch locally will be tomorrow’s employment report. Consensus expectations are for a 15,000 increase in December employment after a huge 61,600 increase in November. Last time around, full-time employment increased 41,900 to 8,501,900 and part-time employment increased 19,700 to 3,901,100 although the unemployment rate remained steady at 5.4%. It is generally estimated that, over time, around 14-15k new jobs per month are enough to keep pace with demographic change and leave the unemployment rate steady though this doesn’t always hold for every individual month’s data.
The AUD opens in Europe this morning at USD0.7950 with GBP/AUD at 1.7320.