After the Q3 wage data showed there was little, if any, pass through from higher employment to higher earnings, the Aussie Dollar had a pretty rough week, though ultimately not as bad as its Kiwi cousin. The RBA couldn’t have made it plainer a fortnight ago when it said it wanted to see, “how much wage growth will pick up in response to improved labour market conditions and the associated reduction in spare capacity”. Markets were quick to hit the AUD which fell from USD0.7630 to 0.7580 and on to a low of 0.7540 on Friday before ending the week at 0.7565; its weakest close in more than five months.
With 11 RBA meetings each year and 4 Quarterly Statements of Monetary Policy (the clue is in the name!) the Minutes of four of the Board meetings are largely redundant. This Tuesday will be one of those occasions. Before then, Jonathan Kearns, RBA’s head of financial stability, and Marion Kohler, head of domestic markets, are scheduled to speak at separate events in Sydney on Monday morning while Governor Philip Lowe will give a speech at the Australian Business Economists (ABE) annual dinner on Tuesday.
Economic data is a little thin on the ground this week, though England’s cricketers arrived in Brisbane ahead of next Sunday’s opening Ashes test to find the British Pound bought 1.74 Australian Dollars; its best level in more than 6 months. For currency traders, that May 9th high of GBP/AUD1.7620 will now be the technical level to watch.