The AUD/USD was hit by a bearish sentiment after RBA’s (Reserve Bank of Australia) statement that the Aussie is adjusting to the decline in the commodity prices, the decision of a monetary policy ease in order to uplift the demand still sitting on the table. Latest report on Australia’s economy show that the labor market is going up, with the job growth exceeding expectations and the average yearly growth of the GDP (Gross Domestic Product) hitting 2.25% for 2016, keeping up a positive outlook of the economy.
Inflation forecast were revised down though, bringing it down by 0.5 basis points and throwing a shadow over the optimistic GDP outlook.
Regarding the GBP/USD pair, we can see that Friday’s session pushed the trend 0.31% downwards to the four-week low at 1.5161, building up distance against the 1.52 handle. Despite the latest UK report according to which the manufacturing sector rebounded above expectations, the bullish sentiment has failed to make its mark. The tone seems to be dictated by the downwardly revised Q3 figures.
On the US side, the labor department data released at the end of last week pictured a far better employment upturn than expected, with a higher number of jobs in October – evidence of a tightening labor market. Last month’s non-farm payrolls came out at 217K, over the estimated 180K at a wide margin, with September’s figure revised upward at 142K, from 137K.
Unemployment went down by 0.1%, from September’s 5.1% to 5.0% last month, the participation rate remaining unchanged at 62.4%. There was also a 0.4% increase in the hourly earnings (estimation being of 0.2%, previous month 0.0%) in comparison to September, adding up to 2.5% yearly. As predicted, the reports show that there is a moderate growth in the US’s economy, the labor market continuing to tighten. All in all, there are very high chances for a Fed rate hike decision in December.
The yellow metal underwent a strong sell-off on Friday, hitting a 3-month low under $1,100/oz, and also marking the 8th day session close with a loss and also a 3 week streak of decline. The fact that the dollar strengthen across the board dragged gold prices even lower, especially with the fresh US reports rising even higher expectations of a Fed rate hike next month after Yellen’s declaration earlier last week that the decision will strongly depend of the forthcoming data. The $1,085 per ounce threshold was the session low, the session closing at around $1,090 per ounce, the daily loss at 1.18%.
