U.S jobs data released over the weekend showed a slowing in jobs growth in addition to a tick higher in the unemployment rate to 4.4%. The economic data was mostly unexpected particularly given the preliminary jobs numbers released mid-last week showed strong signs of growth. We also saw U.S total vehicle sales continue their downward spiral with the latest reading the lowest since May 2014 - in fact total vehicle sales have been on the decline since around Trump entered office; read into that what you like, but it's certainly not an endorsement from consumers or an endorsement on consumers feelings towards the U.S economy and interest rates.
U.S equities also appear to have stalled of late as we get closer and closer to the month of October which has in the past seen the end of many equity bull markets. I'd certainly suggest caution to those heavily invested in U.S equities or those with exposure to U.S equities via ETFs in their Super.
What does all this mean for the Aussie dollar? Well, typically the Aussie dollar has been a risk currency, where good economic data and global economic stability tend to bid it higher, on the other hand when risk aversion peaks we tend to see a sell-off in both equities and the AUD. Those importers or exporters with exposures due over the next 3-6 months may wish to look at some hedging arrangements to either cover costings or just have certainty on what you'll be paying for your imports and exports.
AUD EXCHANGE RATES:
AUD/USD – 0.7964
AUD/GBP – 0.6143
AUD/EUR – 0.6703
AUD/NZD – 1.1127
AUD/JPY – 87.444
DATA RELEASES TODAY:
AUD - ANZ Job Advertisements & Company Operating Profits at 11.30am
GBP – Construction PMI at 6.30pm
***Above rates are indicative wholesale rates and intended as a guide only***
Sign up for a Compass account today and access some of the most competitive rates in the business and arguably the best service.
Senior Corporate FX Dealer
Phone Patrick - 0431 278 632