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AUD shines, European currencies slide

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AUD is by far the strongest currency today following a strong payrolls report while European currencies are in a retreat on Draghi and oil prices. Thursday is a day of central bankers with conferences on monetary policy in the US and Draghi having a hearing in the European Parliament.

A stellar payrolls report in Australia makes any rate cut very unlikely in the near term. A strong increase in employment plus a massive drop in an unemployment rate has just bought more time for the RBA to assess how global headwinds will affect the Australian economy. The AUD has been backed up by surging market rates and looks particularly good vs the NZD at the moment.

The euro tried to recover hitting 1.0780 during the Asian trade today but comments from Draghi at the European Parliament ensured another retest of 1.07. Draghi said he was worried about prospects of core inflation, pretty much dispelling any effects a stronger core CPI in September could have had on the ECB. But it’s not the euro that is the weakest today but the NOK that finds little sympathy from low oil prices. The report in the US inventories and production is out today at 4pm BST.

The markets will look forward to speeches from the FOMC members that take place during numerous conferences on monetary policy. Yellen is leading the field divided more less evenly between the hawks (Lacker, Bullard) and the doves (Evans, Dudley).

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