Australia: Strong domestic data helped AUD outperform - Westpac
|Sean Callow, Research Analyst at Westpac, suggest that Australia's strong data this week helped AUD outperform most G10 currencies, but with a quiet calendar near term, whether AUD gains can continue is probably dependent on the oscillations of US-China trade headlines.
Key Quotes
“Equities had a poor run this week and Australian equities underperformed the Asian region, but nonetheless AUD/USD moved towards 3 months highs around 0.73 as we saw important data on the domestic economy, which was mostly upbeat. The Aussie dollar was also helped by more positive headlines on US-China trade relations.”
“Wages rose 0.6% in Q3 and while wages growth remains soft by pre-GFC standards, the 2.3% annual rate is a 3 year high. October labour force data revealed a stronger than expected 33k rise in total employment, led by full-time work. This kept the unemployment rate steady at a 6 year low of 5.0%.”
“This data sparked a half cent AUD/USD bounce to just under 0.7300, within striking distance of 3 month highs. Key commodity prices have eased, but are still well above July lows, with iron ore around $74/tonne, versus $63 in July.”
“After a busy run, Australia’s data calendar goes quiet for the next week or so. We see the RBA minutes on Tuesday but expect offshore events to dominate for AUD, especially US-China trade negations ahead of the 30 November meeting between President Xi and President Trump. Headlines this week have been mixed but mostly conciliatory and will remain a focus in the week ahead.”
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