AUD/USD – Markets Eye RBA Statement

The Australian dollar is steady on Thursday, as AUD/USD trades at 0.7150 in the North American session. Taking a look at economic releases, US Unemployment Claims rose to 276, missing expectations. We’ll also hear from three key FOMC members during the day. We could see some volatility from the pair on Friday, as the RBA releases its November policy statement, and the US releases US Nonfarm Payrolls, a key market-mover.

Australia has been hit hard by weaker global demand, particularly from China, Australia’s largest trade partner. With the economy marked by sluggish growth and low inflation, there was speculation that the RBA might lower rates for a third time in 2015. Although this week’s rate decision was close, the central bank voted not to take any action and left the benchmark rate at an even 2.00%. Following the statement, RBA Glenn Stevens hinted that the RBA could cut rates if inflation levels did not improve. Will the RBA press the rate trigger in December? We may get a better idea after the RBA policy statement early on Friday. Any hints of a rate cut could send the Australian dollar lower.

US unemployment claims disappointed, as the key indicator jumped to 276 thousand, way above the forecast of 263 thousand. This marked a 5-week high. Still, recent jobless claim releases point to close to full employment, and these types of positive readings are important ammunition for Fed members who are in favor of a rate hike. The markets will now focus on Nonfarm Payrolls, which will be released on Friday. NFP is expected to rise sharply to 182 thousand, so the dollar could be a big winner if the indicator meets expectations.

Wednesday was a positive day for US releases, and the US dollar responded with gains against the Aussie. ADP Nonfarm Payrolls, which precedes the official Nonfarm Payroll report, came in at 182 thousand, very close to the forecast but well off last month’s reading of 200 thousand. The September US trade deficit narrowed to $40.8 billion, its lowest level since February. There was more good news from the ISM Non-Manufacturing PMI, which jumped to 59.1 points, easily beating the estimate of 56.6 points.

AUD/USD Fundamentals

Thursday (Nov. 5)

• 00:30 FOMC Member Stanley Fischer Speaks
• 1:00 RBA Deputy Governor Philip Lowe Speaks
• 12:30 US Challenger Job Cuts. Actual -1.3%
• 13:30 US Unemployment Claims. Estimate 263K. Actual 276K
• 13:30 FOMC Member William Dudley Speaks
• 13:30 US Preliminary Nonfarm Productivity. Estimate 0.1%. Actual 1.6%
• 13:30 US Preliminary Unit Labor Costs. Estimate 2.2%. Actual 1.4%
• 14:10 FOMC Member Stanley Fischer Speaks
• 15:30 US Natural Gas Storage. Estimate 60B. Actual 52B
• 18:30 FOMC Member Dennis Lockhart Speaks

Upcoming Key Releases

Friday (Nov. 6)

• 00:30 RBA Monetary Policy Statement
• 13:30 US Average Hourly Earnings. Estimate 0.2%
• 13:30 US Nonfarm Employment Charge. Estimate 179K
• 13:30 US Unemployment Rate. Estimate 5.0%
  

*Key releases are highlighted in bold

*All release times are GMT

AUD/USD for Thursday, November 5, 2015

AUD/USD November 5 at 16:55 GMT

AUD/USD 0.7146 H: 0.7169 L: 0.7125

AUD/USD Technical

• AUD/USD was uneventful in the Asian session. The pair posted gains in the European session but lost these gains in the North American session.
• The round number of 0.71 remains a weak support level.
• 0.7213 is an immediate resistance line.
• Current range: 0.7100 to 0.7213

Further levels in both directions:

• Below: 0.7100, 0.7060 and 0.70
• Above: 0.7213, 0.7440, 0.7664 and 0.7770

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged, consistent with the lack of movement from the pair. Long positions continue to have a solid majority (57%), indicative of trader bias in favor of the Australian dollar moving to higher levels.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.