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Australia will report its trade balance record later today. As the coronavirus continues to bite into its economy, the figure would be a factor in determining whether the Reserve Bank of Australia will choose to initiate another stimulus package for its economy. Unfortunately, the bank is projected to report much weaker firepower for the month of July, when it had neared peaks of coronavirus cases. From 8.202 billion seen in June, its trade balance is projected to slump over 3 billion at 5.400 billion. However, risk sentiment is still high, and the Federal Reserve is still unsure about the future of its economy for the rest of the year. Markets are paying close attention to the Federal Open Market Committee’s Williams’ speech, and based on the news so far, it’s likely that he won’t be optimistic. Crude oil inventories in the US are also projected to boost from -4.689 million to -1.887 million, showing unsure demand for the commodity.
It looks like Canada really is outpacing the regrowth of the United States. ADP Nonfarm Employment was way lower than what the market had expected prior for the month of August even while its economy shovels into what’s left of its stimulus packages, unable to catch up with the rapid rise of coronavirus cases in the country. For August, the monthly change of private employment came in at 428 thousand. This was supposed to be good for the dollar, but it will disappoint investors from the fact that it had expected at least 500 thousand more than it had recorded. To be exact, Wall Street attempted an estimate of 950 thousand for the figure. The embarrassing outcome is projected to pull the US dollar down despite the increase in crude oil inventories in the US, which is expected to jump by more than 2 million from -4.689 million to -1.887 million, emphasizing that transportation isn’t improving as much as it anticipated.
Contrasting news from the United States and New Zealand economies will guarantee today’s fallout. Although NZ is quiet in today’s trading, the Reserve Bank of New Zealand’s Governor Adrian Orr eased the market’s worries with a confirmation that it has no concern with the level of the currency has. The bank is preparing a package of unconventional policy measures to help support the economic recovery of New Zealand to be launched in the near future. The kiwi-greenback pair is in fact at its highest level in eight months. But since the Federal Reserve is still in talks about what it could do about its deteriorating economy, it looks like it will still boost the kiwi near-term. The disappointing ADP Nonfarm Employment Change will also force more selling pressure for the greenback, especially considering that it reported 500 thousand less than market consensus. From the 950 thousand figure expected, it came in at 950 thousand instead.
As Japan’s economic records stagnate, the country awaits its new Prime Minister. Meanwhile, Australian is expected to report several figures today, such as exports, imports, and trade balance. Investors are keeping a close eye on what could be a decline in fiscal power from the Reserve Bank of Australia with a trade balance of 5.400 billion for July, a sign that it had been declining for the past three months as it struggles to keep up with coronavirus case surges in populated cities in the region. The previous record measured 8.202 billion. Its services sector is also projected to report a fall from 58.2 to 48.1, confirming that a major driver of its economy had seen less demand. Reports also confirmed that the coronavirus has finally pushed Australia into its first recession in almost thirty years with a 7% contraction in the second quarter compared to the first quarter this year. This came in worse than the 5.9% recession expected prior.