AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP
The Australian dollar had a rollercoaster yesterday fluctuating around the 0.6500 handle after the US debt ceiling legislation was passed through the House. Both Republicans and Democrats joined forces to push the deal with a 314-117 split. The deal now heads over to the Senate where support is almost guaranteed. This optimism favored risk sentiment; however, Fed officials forced the hawkish narrative once more leaving the USD bid.
Thursday morning had some favorable data in store for the Aussie dollar with manufacturing PMI for both Australia and China (key importer of Australian commodities) beat estimates (see economic calendar below). Although NBS manufacturing PMI missed yesterday, the Caixin report is said to provide a more reliable private sector measure which markets have since backed. Commodity prices YoY have also shown less decline than forecasted, yet another positive for AUD.
AUD ECONOMIC CALENDAR (GMT +02:00)
From a USD perspective, the economic calendar contains vital jobs data as well as ISM manufacturing PMI. Both are considered leading indicators and could provide valuable insight ahead of tomorrow’s Non-Farm Payroll (NFP) report. Poorer labor statistics coupled with a declining manufacturing sector could hint at a lower NFP figure for tomorrow although recent history shows the ADP print being far from a reliable NFP gauge.
US ECONOMIC CALENDAR (GMT +02:00)
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