The Australian Dollar’s brief show of strength ended abruptly overnight as Fed tapering speculation continued to have an impact and speculation surrounding China’s new loan data took a toll.
Gains against the US Dollar and Euro were pared and the Australian Dollar edged lower against the Pound.
Losses against the New Zealand Dollar were also notable as the South Pacific asset was boosted by a report showing that domestic business confidence had hit a twenty year high.
In the words of market strategist Stan Shamu; ‘The balance of factors is still more to the downside for the Aussie than the upside. If we see any disappointment on the China or Australia data front then we’d expect to see the Aussie come off a little, as well as if Fed members remain quite bullish on the US economy.’
While today’s industrial production report for the Eurozone had little impact on the common currency, the Euro continued to trade higher against the Australian Dollar after output was shown to have increased at a faster pace than forecast.
Industrial production was up 3.0 per cent on the year in November after gaining by 1.8 per cent month-on-month.
The result was the strongest for three years and was driven by solid production in Germany and surging output in Ireland.
In a Reuters report it was stated that ‘the southern periphery, where the crisis erased tens of thousands of jobs and sent countries into the arms of international creditors, saw some improvement as Spain’s output returned to growth and Portugal’s production was up by 1.5 per cent.’
As the week continues further EUR/AUD movement will be occasioned by German GDP and Eurozone trade balance reports.
Of course Australian employment figures will be the major cause of ‘Aussie’ movement this week.
Economists have forecast that the nation’s economy added 10,000 positions in December after adding 21,000 jobs in November, keeping the unemployment rate at 5.8 per cent.
As Australian data has been more than a bit hit and miss lately, economists will be hoping that the data surprises to the upside.
If the nation adds more jobs than forecast the Australian Dollar could approach the tail end of the week in a stronger position against its major rivals.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
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Euro,
Euro,
Euro,
Euro,
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