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Forex - Aussie gains on AIG construction idex, BoJ eyed on yen

Published 05/05/2016, 07:39 PM
Updated 05/05/2016, 07:40 PM
Aussie gains on AIG index
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Investing.com - The Aussie gained in Asia on Friday after a solid survey on construction with markets set on U.S. jobs data later in the day and keeping an eye on the Bank of Japan.

AUD/USD traded at 0.7473, up 0.09%, while USD/JPY changed hands at 107.28, up 0.02%.

The AIG construction index in Australia rose to 50.8, reaching expansion territory in April from a previous level of 45.2.

HIA economist Diwa Hopkins said the results show that activity in Australia's residential construction sector is easing from the record levels of 2015.

"The latest cut to the official cash rate - and critically, its pass-on by the major lenders - will support healthy levels of new home building over the near to medium term. Nevertheless, the level of building is still likely to be shy of what occurred in 2015."

The Reserve Bank of Australia will publish its latest forecasts for the economy in the Statement on Monetary Policy due later Friday.

Markets in Japan re-open Friday as the Golden Week holiday ends with the focus on whether Japan policy-makers will intervene to slow the yen's rise.

The U.S. dollar index, which measures the U.S. dollar's value versus six currencies, was last quoted at 93.73.

Overnight, the dollar rose against a basket of currencies for a third day on Thursday as traders closed out profitable bets against the greenback before Friday's U.S. payrolls report which may confirm the view the Federal Reserve will not raise interest rates soon.

Economists polled by Reuters forecast U.S. employers likely added 202,000 workers in April following a 215,000 increase in March with the jobless rate holding at 5.0 percent.
Steady monthly job gains have yet to prompt a pickup in wage growth, which remains a worry for the Federal Reserve.

In the absence of higher wage growth, together with sluggish global demand, Fed policy-makers will likely refrain from raising policy rates at its June 14-15 policy meeting, which would renew bets the dollar would fall, analysts said.

The futures market implied traders see a 14% chance the Fed will hike rates in June , little changed from Wednesday, Reuters data showed.

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