Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.
Retail Sales Disappoint:
More poor local economic data released yesterday put further downward pressure on the Aussie Dollar with the latest retail sales figures showing a very lacklustre 0.1% increase in month on month sales. Department stores again fielded the brunt of declines off 0.4%, while food retailing and spending at cafe & restaurants grew 0.3% and 0.2% respectively. AUD/USD is off around 10-15 points since yesterday and is nearly 2 cents lower than in late Feb.
Rate Cut Likely:
All the data now seem to point to a rate cut from the RBA as opposed to a rate hike, which unfortunately probably also means a lower AUD. How low will we go? Well I'm not a big fan of making long dated forecasts as the book "Future Babble" paints a pretty bleak picture of expert predictions, but I can provide a basic range and suggest something like 0.6500 to the downside and 0.7500 on the upside over the next 12-24 months is certainly possible. Which means for importers, if we get an opportunity to lock something in around 0.72-0.75 then it would be wise to hedge some of your exposures. The key here is not being greedy, greed always ends in tears.
Exporters really can sit back and relax I think given the way the AUD is travelling and the way local data has been performing.
US Non-Farms Due:
Ahead tonight is U.S non farm employment numbers which is as I say every month a crucial data event. AUD could fall under further pressure tonight if employment numbers are strong and vice versa.
AUD EXCHANGE RATES:
AUD/USD – 0.6979
AUD/GBP – 0.5332
AUD/EUR – 0.6237
AUD/NZD – 1.0357
AUD/JPY – 78.000
All Ords (XAO) – 6,344
Gold – A$1,833/oz
Silver – A$21.43/oz
WTI – US$56.74/barrel
DATA RELEASES TODAY:
CNY - Trade Balance Figures around lunchtime
USD - Non-Farm Employment Change & Unemployment Rate at 12.30am (tomorrow morning)