Employment Numbers Sink the Aussie with the BoE in Action Later Today

It’s a big day for the Pound, with retail sales figures due out ahead of the BoE monetary policy decision. Will there be any dissenters to sink the Pound?
Bob Mason
Forex Yearly

Earlier in the Day:

The economic calendar was relatively busy through the Asian session this morning.

Economic data included 2nd GDP figures out of New Zealand and August employment numbers out of Australia.

The markets also responded to the Wednesday FOMC interest rate decision, projections and forward guidance.

On the geopolitical front, there were no major events to influence in the early hours.

Later this morning, the is also BoJ scheduled to deliver its monetary policy decision that is unlikely to deliver too many surprises…

For the Kiwi Dollar

In the 2nd quarter, the economy grew by 0.5%, quarter-on-quarter, easing from 0.6% in the 1st. Economists had forecast growth of 0.4%.

According to NZ Stats,

  • Service industries, which account for approx. 67% of the economy, supported growth in the 2nd quarter, rising by 0.7%.
  • Within the service industry, eight of the 11 industries saw growth, with household expenditure on services rising by 0.5%.
  • By contrast, goods-producing industries fell by 0.2%, weighed by manufacturing and construction.

The Kiwi Dollar moved from $0.63124 to $ upon release of the figures. At the time of writing, the Kiwi Dollar down by 0.25% to $0.6305.

For the Aussie Dollar

August employment figures weighed on the Aussie Dollar in the early hours. According to figures released by the ABS,

  • Employment increased by 34,700 persons in August. Economists had forecasted a 10k increase, following a 41.1k rise person rise in July.
  • There was a net decrease of 15,500 persons in full-time employment and 50,200 increase in part-time employment.
  • Year-on-year, full-time employment increased by 186,700 persons, while part-time employment increased by 124,000 persons.
  • The unemployment rate rose 5.2% to 5.3%, which was in line with forecast.
  • Seasonally adjusted, the employment to population ratio increased by 0.1 basis points to 62.7%.

The Aussie Dollar moved from $0.68101 to a low $0.67912 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.51% to $0.6793. While the headline figures were positive, a fall in full-time employment and a rise in the unemployment rate weighed.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.25% to ¥108.18 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

A lack of stats will leave Wednesday’s FOMC economic projections and Brexit chatter in focus. Any increased tension in the Middle East will also need to be factored in.

At the time of writing, the EUR was down by 0.03% to $1.1027.

For the Pound

It’s a busy day ahead on the data front. August retail sales figures are due out in the early part of the day. Later this afternoon, the BoE will deliver its September monetary policy decision.

With the markets looking ahead to the BoE interest rate decision later in the day, we can expect Pound sensitivity to the numbers. Forecasts are Sterling negative.

On the monetary policy front, with the BoE expected to hold rates steady, the vote count and minutes will be the main area of focus.

Expect the Pound to respond. Economic data has disappointed suggesting a dovish hold on rates.

On the geopolitical front, Brexit will continue to have a material impact on the Pound.

At the time of writing, the Pound was down by 0.04% to $1.2467.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include September’s Philly FED Manufacturing Index and August existing home sales figures. Of less influence on the Dollar will be the weekly jobless claims and 2nd quarter current account numbers.

The Dollar Spot Index was down by 0.01% to 98.553 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out to provide the Loonie with direction.

A lack of stats will continue to leave the Loonie in the hands of crude oil prices and any further chatter on Iran and the Middle East…

The Loonie was down by 0.12% at C$1.3305, against the U.S Dollar, at the time of writing.

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