Micro-Economic News

The pound / Australian dollar exchange rate is 0.16 pct down on Thursday night's closing level; GBP/AUD is at 1.5193 at 13:50.

The euro / Australian dollar exchange rate is 0.66 pct higher at 1.3113.

The Australian dollar / US dollar pairing is 0.08 pct down at 1.0415.

Please be aware that these are spot market exchange rates - your bank will add their own spread when passing on their quote to you. An independent currency provider will however guarantee to beat your banks offer, therefore you gain more currency than would have been the case. See more on this here.

NZD and AUD diverge

"The divergent Antipodean currency performance overnight is a perfect example, where the NZD extended gains on the back of another hawkish speech by RBNZ Governor Wheeler, while the AUD was weighed by the pressure from a disappointing official Chinese manufacturing PMI on top of some soft Australian data," says Shaun Osborne at TD Securities.

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Australian house prices rose +1.2 pct in January, to be +1.8 pct on the year, this is the first positive annual print in a year.

Q4 PPI rose +0.2 pct, below market expectations for a reading of +0.5 pct, but now it’s released after CPI, market interest is minimal.

Manufacturing PMI for Jan dropped to 40.2 from 44.3, the worst since June 2009 - manufacturing continues to wilt under the strong currency.

But, is this a turning point in Australian dollar strength?

Leander Dreyer at Jyske Bank has already called a Sell on the rampant euro today, and now he is suggesting it could be time to sell the Australian dollar:

"The overnight PMI data from Australia revealed a drop from 44.3 to 40.2 – the lowest level since the summer of 2009. Australia is definitely among those suffering most from the recent JPY weakening. About 12% of Australian exports go to Japan. If commodity prices begin to fall, AUD will be vulnerable.

"Selling AUD against EUR and DKK is a good hedge against a currency war. Australia still has lots of ammunition in the central bank if it wants a weaker currency. Technically, EURAUD has given a strong buy signal."