The Australian dollar weakened against the other major currencies in the pre-European session on Friday, as yesterday’s disappointing jobs data raised speculation that the Reserve Bank of Australia is likely to cut rate as early as next month.
Traders expect the RBA to ease interest rates by 25bps to 1.75 percent in its monetary policy meeting on November 3.
Data from the Australian Bureau of Statistics showed that the Australian economy lost 5,100 jobs in September to 11,769,900, missing forecasts for an increase of 9,600 jobs following the upwardly revised 18,100 increase in August. However, the unemployment rate was a seasonally adjusted 6.2 percent in September,in line with forecasts and unchanged from the previous month.
Thursday, the Australian dollar rose amid risk appetite, as weak U.S. economic data boosted expectations that the Federal Reserve will hold off raising interest rates this year. The Australian dollar rose 0.62 percent against the U.S. dollar, 0.47 percent against the yen, 1.15 percent against the euro and 0.28 percent against the loonie.
In the pre-European trading, the Australian dollar fell to an 8-day low of 0.9369 against the Canadian dollar, from an early high of 0.9435. On the downside, 0.92 is seen as the next support level for the aussie.
Against the U.S. dollar and the yen, the aussie edged down to 0.7275 and 86.68 from early highs of 0.7337 and 87.32, respectively. If the aussie extends its downtrend, it is likely to find support around 0.71 against the greenback and 84.00 against the yen.
Pulling away from an early 3-day high of 1.5494 against the euro, the aussie dropped to 1.5645. The aussie may test support near the 1.59 region.
The aussie edged down to 1.0659 against the NZ dollar, from an early high of 1.0741. This may be compared to an early near 5-month low of 1.0631. The aussie is likely to find support around the 1.3 area.
Looking ahead, Eurozone CPI data for September and trade balance for August are due to be released later in the day.
At 6:30 am ET, Bank of England’s Monetary policy Committee member Kristin Forbes will deliver a speech at business summit on “Growing your business in a global economy” in Brighton, England.
An hour later, European Central Bank member Benoit Couere is expected to speak at an interparliamentary conference “Towards a Progressive Europe” organized by German social democratic MPs in Berlin.
In the New York session, Canada manufacturing sales data for August, U.S. industrial production, U.S. weekly rig count report and the University of Michigan’s preliminary U.S. consumer sentiment index for October are due.
The material has been provided by InstaForex Company – www.instaforex.com