AUD/USD higher on dollar sliding in thin liquidity, eyes 0.7250
AUD/USD has been looking to recover the recent losses on the 0.72 handle where the pair fell from a touch through 0.73 the figure earlier in the month. There has not been anything domestically great about the Aussie economy of late but there has been a slight turn up in positive sentiment that has supported the currency.
The Reserve Bank of Australia (RBA) has been a touch more optimistic, however with GDP forecasts higher, rising from 0.25pp to an above-consensus 3.50% in 2019 and 2020. At the same time, the unemployment rate was lowered 0.25pp to 4.75% in 2020 and inflation in 2020 is now seen as a “a bit higher” than its 2.25% forecast for 2019. Today's wages data will be a key focus with this regard.
Eyes on wages
Analysts at ANZ explained that they are looking for a 0.7% q/q rise in the WPI in Q3. "This would be a step up from the 0.5% q/q average gain over the past three years and the highest quarterly gain since March 2014. It would see annual growth in wages rise to 2.4%. While ongoing tighter labour market conditions will be supportive, the main drivers of strength will be the 3.5% lift in the minimum wage."
"The pair would need to extend its advance past 0.7250 to actually regain its bullish stance, while bears will take full control on a break below 0.7130, the 38.2% retracement of the mentioned decline," Valeria Bednarik, Chief Analyst at FXStreet explained.
Meanwhile, analysts at Commerzbank argued that provided that the latter level holds, the September and current November highs at 0.7302/14 are expected to be revisited. "If this resistance zone were to be bettered, the 200-day moving average at 0.7459 and the July 9 high at 0.7484 would be in focus."