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US Dollar Strengthens despite Flynn Fallout, Can the Australian Dollar Rebound on Jobs Data?

US Dollar Exchange Rates

The Australian Dollar has dropped by around -0.2% against the US Dollar today, with investors buying into the USD in force after hawkish Fed commentary.

AUD has failed to rise against USD even though a rise has been seen in the recent Westpac consumer confidence change from 97.4 to 99.6.

Westpac Senior Economist Matthew Hassan elaborated on the underlying issues in the Australian economy;

‘At just below 100 the index is in slightly pessimistic territory with consumers reporting family finances under pressure and a mixed outlook for the economy’.

NAB Chief Economist Alan Oster added;

‘We remain concerned about the economy’s trajectory in 2018, as the contribution from residential construction, LNG exports and temporarily higher commodity prices fade and household consumption remains constrained by weak labour income growth’.

The economic trajectory of the US for the present time is looking considerably brighter, with recent inflation and sales figures beating forecasts across the board in January.

As well as core inflation jumping annually from 2.1% to 2.5%, yearly retail sales have climbed from 4.4% to 5.6%. The one stumbling point has been monthly retail sales in January, which have slowed.

While the sideshow of Michael Flynn’s resignation due to Russian links has played out in the background, hopes that a near-term US interest rate hike is coming have overridden any real negative sentiment about this event.

The Australian Dollar might be able to stage a recovery against the US Dollar in the near-term, given that high-impact Australian jobs data is incoming.

While unemployment is predicted to remain at 5.8%, the January employment change has a rise of 10k persons forecast.

The week’s remaining US data releases, set to cover jobless claims in early February as well as the start of construction on new houses, could further facilitate Australian Dollar gains against the US Dollar

A slowdown in housing starts is expected in January, while claims are expected to rise in the initial field but fall when it comes to repeat claimants.

Recent AUD USD Interbank Exchange Rates

At the time of writing, the Australian Dollar US Dollar (AUD USD) exchange rate was trending in the region of 0.76 and the US Dollar Australian Dollar (USD AUD) exchange rate was trending in the region of 1.30.