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The AUD finished Wednesday’s session unchanged after mixed economic data from the US fueled interest rate cut speculations by the Fed. AUD/USD trades at 0.6648,
US ADP private employment figures overnight also contributed, with the market starting to price in a second rate cut by year end.
Equity markets performed strongly following the Bank of Canada’s 25bps rate cut and in anticipation of a similar cut from the ECB tonight. The yield on the US 10-year dropped by 4bps to 4.28%. The ADP report showed US private payrolls grew by 152k in May, which was below the expected 175k. The US services ISM index rebounded significantly, rising to 53.8 from 49.4 in Aril, driven by stronger business activity and new orders growth, exceeding expectations. However, survey respondents expressed ongoing concerns about high interest rates and inflation.
Non-farm payrolls data at the end of the week and the Fed’s meeting next week are also key events to watch.
Economic data to watch out for.
• JP – BOJ Boad Nakamura Speech in Sapporo
• Germany – Apr. Factory Orders m/m
• Germany – May. HCPB Germany Construction PMI
• UK – May. S&P Global UK Construction PMI
• EU – Apr. Retail Sales y/y
• US – May. Challenger Job Cuts y/y
• EU – ECB Policy Rate
• US – Jun-01. Initial Jobless Claims
• US – Apr. Trade Balance
Mid market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6648 |
| AUD/NZD | 1.0736 |
| AUD/JPY | 103.70 |
| AUD/CNY | 4.8282 |
| AUD/EUR | 0.6117 |
| AUD/GBP | 0.5200 |
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