The US Dollar (USD) has risen against the ‘Aussie’ (AUD) today after a mixed outcome in the Australian Employment figures.
Australian Dollar to US Dollar (AUD/USD) Exchange Rate Remains Fluid ahead of Tomorrow’s US Data
The Australian Dollar (AUD) has reversed the bullish gains made yesterday, seeing a decline across the board. This comes after the Australian Employment Change and Unemployment Rate figures for July painted a mixed picture; the former figure increased by 38.5k (nearly three times the forecast amount). However, the Unemployment Rate also rose from 6.1% to 6.3%, which may have counteracted the positive effects of the increase in employed persons today.
The US Dollar (USD) gained over the ‘Aussie’ (USD/AUD) by 0.3% today and saw a greater rise of 0.4% against the Swiss Franc (USD/CHF). This comes ahead of the release of the US Claims data for July and August, for which forecasts have been mixed. The Fed’s reaction to any unexpected figures may be indicative of their response to the crucial Change in Non-Farm Payrolls and Unemployment Rate data for July, due out tomorrow. Any major gains could bring an interest rate hike as early as September, while a major decline might prevent this decision being made until next year.
The US Dollar to Australian Dollar (USD/AUD) exchange rate has risen slightly today, a reversal of yesterday’s disadvantageous performance for the US Dollar (USD).
Federal Reserve Decision Remain Key to Performance of ‘Greenback’ (USD)
The US Dollar (USD) has gained against the Australian Dollar (USD/AUD) by 0.1% today, a minor gain, but still an improvement over yesterday’s -1.8% loss. The ‘Aussie’ (AUD) made a bullish advance across the board yesterday but has today seen a subsequent decline. This comes after Federal Reserve Bank of Atlanta President Dennis Lockhart said that an interest rate hike in September would be ‘appropriate’, and that only ‘significant deterioration’ in US economic data would prevent him from voting in favour of an interest rate increase.
The news has gone some way to allay concerns that an interest rate increase won’t occur this year, after discouraging US economic data releases on Monday threw doubts on the possibility of an interest rate hike. The US Dollar has trended in a narrow range against the South African Rand (USD/ZAR), the New Zealand Dollar (USD/NZD) and the Norwegian Krone (USD/NOK) today, a performance indicative of the continuing uncertainty that surrounds the US Dollar and the Fed’s decision making.
The US Dollar to Australian Dollar (USD/AUD) exchange rate has fallen sharply today after doubts emerged over whether a US interest rate hike would take place in the future.
US Dollar to Australian Dollar Exchange Rate News: USD/AUD Nosedives after Worse ISM Results than Expected
The US Dollar to Australian Dollar (USD/AUD) exchange rate fell by -1.8% today, after worse-than-forecast US data results raised serious questions over the likelihood of a Federal Reserve interest rate hike, given that the central bank requires signs of positive US economic growth to make this decision. The ‘Greenback’ (USD) also fell by -0.6% against the Indian Rupee (USD/INR) and trended in a narrow range against the Pound Sterling (USD/GBP).
The key trigger for this decline was the release yesterday of the US Construction Spending figure for June, and the July ISM Manufacturing data. Both results showed a fall over the previous month’s figures. The Fed has placed major emphasis on seeing positive economic growth when it comes to deciding the US interest rate. Therefore, this news has been a significant stumbling block for the US Dollar’s performance, reflected in its decline today.
Australian Dollar to US Dollar (AUD/USD) Exchange Rate Skyrockets after ‘Aussie’ Receives Two Major Boosts
By contrast to the US Dollar (USD), the Australian Dollar (AUD) has gained across the board today after receiving two pieces of good news for the Australian economy.
The first came from Reserve Bank of Australia (RBA) Governor Glenn Stevens, who froze the Australian interest rate at 2% today. While an increase would have been preferable, the lack of a decrease means that the Australian economy is perceived to be recovering, which has sparked rumours over an interest rate hike in the future. The ‘Aussie’ gained against the New Zealand Dollar (AUD/NZD) and the Canadian Dollar (AUD/CAD) by over 1.6%, saw a rise of more than 1.9% against the Chinese Yuan (AUD/CNY), the Euro (AUD/EUR) and the Pound Sterling (AUD/GBP) and saw its greatest gains of 2% against the US Dollar (AUD/USD).
The other piece of good news for the Australian Dollar has already been mentioned; because the US Dollar has declined, the price of Australian commodities, while still low, has increased slightly due to the negative performance of the ‘Greenback’; US Dollars are used to price most world commodities.
US Dollar to Australian Dollar Exchange Rate Forecast: US Interest Rate Hike Remains Uncertain, Results on Friday could prove Decisive
The performance of the US Dollar (USD) in the weeks to come is mostly dependent on whether or not it will receive an interest rate increase from the Fed. This chance increases based on positive economic growth data, so Friday’s US Unemployment Rate and Change in Non-Farm Payrolls data for July is likely to be a crucial factor in the Fed’s decision.
The Australian Dollar (AUD) also has key employment-based data due for release on Thursday: the Employment Change and Unemployment Rate figures for July. A minor increase is forecast for the latter record, but a significantly more optimistic prediction for growth in the former field may eclipse this slight blemish on the current success of the ‘Aussie’.
Current USD, AUD Exchange Rates
The US Dollar to Australian Dollar (USD/AUD) exchange rate was trending in the region of 1.3482 and the Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7418 today.