Aussie dips further as trade, Caixin China services disappoint
The Aussie fell further dipped in early Asia on Thursday as the trade balance fell short of surplus expectations and Caixin said its PMI for services in China slipped as nonfarm payrolls looms at the end of the week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.08% to 92.82.
In Australia, a trade balance surplus of A$856 million was far below the A$1.800 billion expected for June. As well, in China the Caixin services PMI came in at 51.5 well below the of 51.9 seen, an 51.6 in June.
Overnight, the dollar sank against a basket of global currencies on Wednesday, after private sector job creation for July undershot forecasts, lowering expectations for nonfarm payrolls data due this week.
ADP and Moody's Analytics said U.S. private employers added just 178,000 jobs for the month, short of analysts’ forecasts of 185,000.
The weaker-than-expected private payrolls report comes two days ahead of nonfarm payrolls data due Friday, pointing to a possible slowdown in the U.S. labor market, adding to expectations the Federal Reserve may abandon its plan to hike rates at least once more this year.
Cleveland Fed President Loretta Mester, however, said on Wednesday, the central bank can stick to its gradual approach to monetary tightening, as it could help prolong economic expansion.
“I see benefits to this consistency: it removes some ambiguity and it underscores the fact that we set monetary policy systematically, with a focus on the medium-run outlook and risks around the outlook and their implications for our policy goals,” Mester said in remarks to the Community Bankers Association of Ohio in Cincinnati.
The latest setback for the greenback, sparked a move higher in sterling, ahead of the Bank of England (BoE) interest rate decision due Thursday.
The BoE will stand pat on interest rates but traders will carefully parse the accompanying minutes of the BoE meeting and comments from BoE Governor Mark Carney for clues about future monetary policy.