Forex Marketz Daily Forex News – Fully Markets Update
This morning, the Australian dollar slipped lower as its climb higher stalled. This comes despite solid Australian economic data released earlier today.
The commercial lender’s Westpac leading index indicator was released. It came out with a growth of 0.12 percent for July after contracting in June by 0.14 percent. The index is compiled by the Melbourne Institute, which is an economic and social research company. This is data comprised of local financial, housing and labor markets. It also combines consumer expectations about economic activity, and employment.
The Australian dollar had been moving higher against the US dollar throughout the early Asian morning, but the data brought this rise to a halt. Despite the solid Westpac print, the bank said that the index still points to below average near term growth in the Down Under. Westpac assesses that trend at 2.75 percent. The corporate lender expects growth of 2.5 percent next year.
Australian Dollar turns to the RBA
There will be an even bigger hurdle for the local currency unit on Thursday. The Down Under is expected to release its official employment numbers.
The Reserve Bank of Australia (RBA), as it has stated over and over, is also especially concerned about a bubble that is increasing with household balance sheets, or debt. The labor market is far more closely plugged in to monetary policy action by the RBA. Investors will be watching this release closely. A solid print with labor numbers could add support for the Aussie dollar. This is not welcomed by the RBA. They prefer a weak local currency to help support inflation that remains below its two percent target.
The RBA is not likely to change its monetary policy until middle of next year. They are currently in a wait and see mode.
