The Aussie Dollar certainly had a volatile session in the Northern Hemisphere on Wednesday. It first got caught up in the USD spike lower late in the Sydney morning, touching a high of USD0.7993; the highest since September 20th. There were no news headlines whatsoever to trigger this move and, given the changed regulatory environment these days in wholesale FX markets, no chat around what client flows may have triggered it. By the London opening it was down to 0.7945 but then was bought steadily and persistently through the European day and in the New York afternoon had regained all its prior losses and more to be back on US 80 cents for the first time since September and on to an intra-day high of 0.8021.
Unusually, the AUD rise came despite further weakness in commodity prices. Gold and silver were both down on the day, as too were copper, zinc and nickel, though iron ore was pretty flat as was aluminium. Along with more general USD weakness, perhaps it was the proximity of the 2018 high at 0.7993, a change of big figure to 80 cents and hopes for an upside surprise in this morning’s Australian labour market report which all contributed to the AUD/USD surge.
To recap, consensus expectations today 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.
Ahead of the data, the AUD opens in Asia at USD0.8005 with AUD/NZD at 1.0960 and GBP/AUD1.7330.