Australian Dollar Could Get Lift From Labour Data, China GDP
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The Australian Dollar is currently straining at the top of the key downtrend channel which has bounded trade for the vast majority of this year.
There is at face value very little reason to expect a lasting break here. The US Federal Reserve remains upbeat on economic prospects and wedded to further monetary tightening this year assuming that the economic data hold up.
The Reserve Bank of Australia by contrast kept the key Official Cash Rate at its 1.50% record low for a 20th straight month in April. It is expected to leave it there until well into 2019 too, according to futures-market pricing.
But, even if that overall AUD/USD downtrend remains in place, there could be scope for some short-term gains this week. Wednesday will bring Chinese Gross Domestic Product data, to which the Aussie often reacts. Thursday will being Australian labour market data, amid signs that relatively strong jobs market is at last making its presence felt in tighter wages. RBA Governor Philip Lowe said last week that wage growth may finally have troughed. Markets will be on watch now for any confirmation that he is correct.
If neither data point underwhelms, then there could be scope for AUD/USD upside next week, even if it isn’t very long lived.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.