The Australian dollar is powering ahead today against its US counterpart after last week’s meeting of Key central bankers at Jackson hole
Speeches from US Fed President Janet Yellen and ECB president Mario Draghi at Jackson Hole failed to impress investors with Yellen giving the impression that further rate hikes in the US may not be forthcoming contrary to what was predicted esrlier,
“Yellen said that ‘substantial progress’ has been made toward the Fed’s economic objectives of maximum employment and price stability, but her comments suggest the Fed is closer to the end than the beginning of their tightening cycle,” noted Joseph Capurso, senior currency strategist at the Commonwealth Bank.
Mr Capurso also said the ECB president Mario Draghi surprised the market by not mentioning the current strength of the Euro and the potential damage it could have on the European economy,
“Draghi did not mention the EUR’s recent appreciation in contrast to the expectations of some market participants that Draghi would talk down the Euro” he added.
With little in the way of local data this week the Australian dollar is likely to be driven by external factors such as GDP numbers from the US and the all important unemployment rate and Non-farm payrolls figures on Friday.