Australian Dollar Gains After Volatile Session

The Australian dollar was rather volatile today. The currency rallied after somewhat mixed domestic macroeconomic data, fell following the release of a services sector report from China, but has recovered by now.

The Australian Industry Group Australian Performance of Services Index, released overnight, showed a drop from 54.9 to 54.0 in February. The Melbourne Institute Inflation Gauge slipped 0.1% in February, month-on-month. The number of building approvals jumped by 17.1% in January from December, far above the medium forecast of 5.1%. Seasonally adjusted company gross operating profits increased by 2.2% in the December quarter from the previous three months, beating the consensus forecast of 1.6%. The ANZ job advertisements slid by 0.3% in February, month-on-month, after climbing 6.2% in January.

As for China’s data, the seasonally adjusted Caixin China General Services Business Activity Index declined slightly from 54.7 to 54.2 in February. China is Australia’s biggest trading partner, therefore economic reports from the Asian nation tend to have a major impact on the Aussie.

Now, traders wait for the policy meeting of the Reserve Bank of Australia scheduled for 3:30 GMT on Tuesday.

AUD/USD traded close to its opening level of 0.7762 as of 22:46 GMT today after slipping to the daily low of 0.7728 earlier. EUR/AUD was also near the opening of 1.5883 following the rally to 1.5935 — the highest level since February 2016. AUD/JPY rallied from 81.89 to 82.39, bouncing from the daily low of 81.48 — the lowest rate since April 2017.

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