Good morning all. Overnight the Bank of England decided to lower their official interest rate by 25 basis points to 0.25% sending the GBP sharply lower vs it's peers. In all the Pound fell around 2% retracing towards levels not seen since late 2013.
Locally retail sales fell to just 0.1% with consumer spending failing to meet estimates and painting a pretty bleak picture for the Aussie economy which for all intents and purposes looks headed towards a period of sustained stagnant growth. However the one shining light for importers is that despite the 25 basis point cut on Tuesday from the RBA and the mediocre retail sales figures yesterday, AUD/USD is still higher than where we were on Monday! Trying to understand that conundrum requires a look at the global macro environment where very low interest rates and therefore little yield in holding the GBP, USD, JPY or EURO makes the Aussie dollar an attractive proposition with its comparatively high interest rates and AAA rated economy.
Ahead this evening is U.S employment data in Non-Farm payrolls and it looks like we could be headed for another cracking number here considering the preliminary ADP figures were strong on Wednesday evening. Estimates suggest we'll see 180K new jobs and the U.S unemployment rate dip back towards 4.8%.
DATA RELEASES TODAY:
AUD – RBA Monetary Policy Statement at 11.30am
USD – Non-Farm Employment & Unemployment Rate at 10.30pm
AUD EXCHANGE RATES:
AUD/USD – 0.7632
AUD/GBP – 0.5815
AUD/EUR – 0.6857
AUD/NZD – 1.0639
AUD/JPY – 77.249
***Above rates are indiciative wholesale rates and intended as a guide only***
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Senior Corporate FX Dealer
Contact Patrick for a quote on 0431 278 632