- RBA Gov Stevens: Rate cuts might be less effective
- Stevens highlighted weak employment in his latest testimony
- China’s CB leading index down from 1.1% to 0.9% in Jan
Dollar bulls seem to have been spooked by Friday the thirteenth, as the U.S. currency gave up a lot of ground to its higher-yielding forex counterparts. EUR/USD is up 34 pips (+0.30%), GBP/USD is looking at a 29-pip gain (+0.19%), and USD/JPY is down 58 pips (-0.48%).
Not even downbeat remarks from RBA Governor Stevens was enough to keep the Aussie’s gains in check, as it also advanced against the Greenback. Australia’s central bank head reiterated that unemployment could peak a little higher than initially anticipated but cautioned against overreacting to the January jobs figures. Apart from that, he also pointed out that rate cuts are likely to have a smaller impact on growth compared to the past and repeated that he’d like to see the Aussie fall further in value.
AUD/USD is still up 54 pips (+0.69%), AUD/JPY ticked up by 16 pips (+0.17%), and AUD/CAD recovered by 56 pips (+0.57%) in the past few hours. Data from China also showed a bit of weakness, as the CB leading index fell from 1.1% to 0.9% in January, but the Aussie was able to continue its risk rally.
Up ahead, the forex calendar shows that the euro zone has a bunch of GDP releases on tap. These include the preliminary growth readings from France, Italy and Germany, as well as the entire region. Germany is expected to post a 0.3% GDP reading for Q4 2014 while France might show a mere 0.1% economic expansion. These should be enough for the euro region to print another 0.2% GDP figure for the quarter. Do stay tuned for weaker than expected reports which might force the shared currency to return some of its recent gains!
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