Aussie pair price action was pretty diverse this week as mixed Aussie data battled RBA rhetoric, global risk sentiment and counter currency flows.
Australia Headlines and Economic data
- House prices fall faster than during global financial crisis
- Reserve Bank clings to wage growth hopes
- Australia is being dragged toward an interest-rate cut
- Australia’s falling home prices not yet a threat to banks: RBA
- Australian jobless rate hits near eight-year low, tempering rate cut bets
- Australia central bank research shows income, not just property weakness, key for policy
Major Market Drivers for the Australian Dollar
As mentioned above, Aussie pairs were kinda all over the place this week. We saw an early broad spike higher at the week’s open, which could be attributed to a pop higher in iron ore prices (one of Australia’s top exports) and a bounce in Asia region sentiment after Singapore reports a rebound in exports.
From then on there was no real direction, even with the latest Australian housing data and the release of the Reserve Bank of Australia’s latest monetary policy meeting minutes, until early in the Wednesday Asia session when RBA assistant governor Michele Bullock commented on the risks that Sydney’s apartment market posed, prompting a short-term uniform sell off in Aussie pairs.
This is where we began to see divergence between Aussie pairs as counter currency catalysts like the FOMC monetary policy meeting took precedence. But traders sparked a quick move higher in Aussie pairs going into the Thursday session after the latest Australian jobs report showed the unemployment rate hitting eight-year lows. Unfortunately for Aussie bulls, the pop higher was short lived, likely as traders looked past the headline numbers and saw a slowing in employment growth momentum.
From that point on, it looks like Aussie bears took the over the pairs into the weekend, likely on the growing global risk aversion sentiment that seems to have taken hold of the markets this week. This could be attributed to a combination of renewed fears of slowing global growth (sparked by European PMI’s), the ongoing Brexit drama (didn’t get the longer Brexit extension), and some U.S. negotiators seeing China push back on trade vows. Whatever the case may be for pressure on the Aussie, more pairs than not fell into the red to make the Aussie a net loser on the week.