The Australian dollar held steady against its US counterpart but dropped against the euro and crashed versus the Japanese yen today. Today’s macroeconomic data in Australia was positive, but comments from central bank’s officials were not that good for the currency.
National Australia Bank business confidence index rose from +10 to +12 in January, touching the highest level since April. Experts had anticipated it to stay unchanged. Alan Oster, NAB Group Chief Economist, commented on the result:
The rise in confidence may reflect the improved global economic backdrop, but it is important to note that the survey was conducted before the current turbulence in international financial markets.
Meanwhile, Reserve Bank of Australia Assistant Governor Luci Ellis stated that wage growth will likely be gradual. The RBA estimated last year that the unemployment rate should fall to 5% before employers will start raising wages, but the rate actually increased to 5.5% in December. Ellis said:
Since then we have not seen a reason to change that broad assessment. But we are mindful that, as we approach that figure, thereâs a risk we find there is more room to come down before wage growth picks up in earnest.
She then added:
Our forecasts are for wage growth to pick up from here, but not immediately and then only gradually.
AUD/USD traded at 0.7871 as of 11:17 GMT today after opening 0.7861 and falling to the intraday low of 0.7847. EUR/AUD gained from 1.5629 to 1.5687. AUD/JPY slumped from 85.41 to 84.70.
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