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Saturday, 28 January 2023
Australia’s Dollar Solid After Ok Jobs Data, CPI Ahead. Will AUD/USD Rally?

Australia’s Dollar Solid After Ok Jobs Data, CPI Ahead. Will AUD/USD Rally?

2022-10-31

The Australian dollar is given a hard time by most people in the markets. It is quite volatile and the gains are often pyrrhic. It was overvalued in the past and has now found its feet as a result of housing and farm sector confidence returning to normal levels. The recent figures on the services sector were positive, with the largest increase being in the accommodation and food services sector. The services sector accounts for about 74% of the country’s GDP and is where the bulk of the new jobs are being created. The services sector is also one of the most productive in the world. The services sector is the main driver of the economy, making up about 71% of the country’s GDP. Manufacturing accounts for just over a quarter of the GDP, with the rest in services. The only way for the Aussie dollar to gain ground is if the services sector improves further or the manufacturing sector tanks. The Aussie dollar is likely to strengthen against the U.S. Dollar in the coming sessions, particularly if the manufacturing sector continues to post weaker than expected data.

What Has Driven the Aussie Dollar Down?
The Aussie dollar dipped below US$1.30 against the Euro on January 11 and later fell to US$1.25 on January 17. The dollar fell further to US$1.20 on February 2, and threatened to drop below US$1.10 before recovering slightly. The dollar has been under pressure recently as concerns about the growth of the Chinese economy, along with an upcoming interest rate hike, led investors to question the health of the global economy. The Australian services sector, which accounts for about 74% of the country’s GDP and is where the bulk of the new jobs are being created, also accounts for a large share of the country’s trade deficit. When services trade fall, goods and manufacturing have to pick up the slack and that is what has been happening recently.

The Australian Services Sector
The services sector accounts for about 74% of the country’s GDP and is where the bulk of the new jobs are being created. The sector is also one of the most productive in the world. The sector is the main driver of the economy, making up about 71% of the GDP. Manufacturing accounts for just over a quarter of the GDP, with the rest in services. The only way for the Aussie dollar to gain ground is if the services sector improves further or the manufacturing sector tanks. The Aussie dollar is likely to strengthen against the U.S. Dollar in the coming sessions, particularly if the manufacturing sector continues to post weaker than expected data.

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