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Another tough week for the Aussie as global risk aversion takes hold and a weak Australian jobs number signals that the RBA may come with a rate cut sooner rather than later.
Australian Headlines and Economic data
Monday:
- No signs of a direct catalyst for early week weakness. One possibility could be that the Aussie was tracking gold, which fell to start the week on the U.S.-Mexico deal to avoid trade tariffs. But it’s more likely a possibility that traders were selling Aussie ahead of the Australian jobs report.
Tuesday:
- Australia business confidence bounces even as activity sags-survey
- Global risk sentiment began to shift more negative starting on Tuesday as the latest developments in the U.S.-China trade story seemed to turn negative; Donald Trump says he’s personally holding up trade deal with China ahead of G20
Wednesday:
- RBA Kent: Financial links between Australia & China have deepened and likely to continue to grow
- Australian Consumer confidence tumbles after the Reserve Bank cuts rates – Consumer sentiment is a top tier leading indicator, so it’s no surprise that there seemed to have been a uniform move in Aussie pairs lower after this event.
Thursday:
- Australia jobless rate holds at 5.2% despite a net increase in jobs, likely due to more people seeking work – based on the drop in the Aussie following the news, it looks like traders immediately priced in a July rate cut based on the RBA’s view that more stimulus is needed to achieve full employment.
Friday:
- A short burst of broad Aussie weakness in the early Asia session, most likely in sympathy with the Kiwi selloff after a weak NZ manufacturing update. Global risk aversion behavior is also a likely contributor after tensions rise in the Middle East following the Thursday oil tanker attacks.
