The AUD got a boost on Friday following the release of AIG services index data. The data showed the index rose from 49.7 in April to 51.5 in May. The increase puts the index into expansion territory, which is a sign that Australia’s economy is improving.
The AUD/USD rose 0.11% to 0.7237, the USD/JPY is up 0.07%, trading at 108.95, and the EUR/USD is up 0.02% to 1.1155.
Australia’s capacity utilization dipped in May as price measures remained untouched, indicating little inflation pressure on the Aussie. “The return of the large services sector to expansion in May is a sign of the resilience of the economy,” stated Chief Executive of AI Group Innes Willox.
Japan struggled in early morning trading on data that points to 0.3% wage growth in April. The growth falls far below the 0.9% gain year-over-year, causing concern for the country. China’s Caixin services PMI is expected to have increased by 0.2 since April, up to 52.0 in May.
Upbeat employment data out of the U.S. allowed the dollar to remain steady on Thursday. The U.S. dollar index, which measures the greenback against six major currencies faltered overnight, down 0.01% to 95.55.
The European Central Bank’s president Mario Draghi warned on Thursday that inflation levels will remain low throughout 2016. Draghi points to the ECB revising its inflation outlooks to 0.2% on the year, up from 0.1%. Inflation is expected to be 1.6% in 2017.
The bank’s growth forecasts rose from 1.4% to 1.6%. Forecasts for 2017 and 2018 remain unchanged at this time.
Draghi reaffirmed the ECB’s plans to continue the bank’s bond-purchasing program. The band will also buy debt issued by companies starting next week as part of the bank’s stimulus program first announced in March.
The U.S. Department of Labor released data that initial jobless claim filings for the week ended May 28 dropped to 267,000 down from 268,000 a week prior.