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Ben Robson's coverage of the trading week's most important market events.
The opening of the week was somewhat quiet, especially after the strong moves in the markets on Friday following strong US employment data. The economic calendar was not full of major economic events throughout the day.
Looking ahead to a new trading week and following the release of very positive US labor market data this past weekend, this week market turns to inflation data, and whether the positive tone of data from the US economy will continue and supports the Fed's path to raise interest rates for the third time this year.
The US dollar managed at the end of the week to erase losses since the beginning of the week, following positive employment data that exceeded expectations in July. The Non-Farm Employment Change Index added 209 K jobs with the June reading revised to 231 K jobs. Also, unemployment rates were at their 16-year low of 4.3%, and the hourly wage rose by 0.3% in July.
The Australian dollar erased yesterday's gains and fell significantly against the US dollar today, reaching its lowest level since July 26 at 0.7913, after the Australian trade surplus narrowed in June more than expected, with a surplus of only 856 A$ million. After breaking the ascending channel on the 4 hours chart, the AUDUSD is trying to re-test the broken bullish trend line and is expected with stabilizing below, it would be targeting the support level at 0.7873 then 0.7755.
The New Zealand dollar fell significantly, with the New Zealand dollar hitting its lowest level since July 20 at 0.7390, following the disappointing New Zealand employment data for the second quarter, the employment rate fell by 0.2% against expectations of a 0.7% rise. This is the first time that New Zealand's employment rate has been down for two years, and the positive thing that unemployment fell to 4.8% at its lowest level in eight years.
The most significant move today was a drop-in oil prices from a two-month high of 50.40$ a barrel to 48.30$ as ample global supplies countered strong demand, as well as expectations of a continuing fall in US crude inventories.
As usual, markets are looking to the US non-farm employment data on the first Friday of each month to monitor labor market improvements and the impact on the Federal Reserve rate hike. The Bank of England and the Reserve Bank of Australia will also be in the spotlight. Below are the highlights of the week's important economic data.
This week, there has been a lack of significant economic data. The start was in Australia, when inflation figures slowed in the second quarter of 2017 unexpectedly, with the consumer price index rising 1.9% year-on-year, while rising 0.2% quarter-on-quarter. The Australian dollar rose throughout the week against the US dollar, to a two-year high of 0.8064.
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