Yet again Australian data surprised to the upside, this time registering another 30-year low in unemployment. The only question now is when, rather than if, the RBA will hike rates in the near-term. Australian employment increased another 31.9K jobs – nearly double market expectations while the unemployment rate remained at 4.3%. Although wage pressures have yet to be felt in the Australian economy, today’s numbers suggest that labor is becoming increasingly scarce, and RBA will have to take pro-active steps in its monetary policy to ensure that inflation does not get out of control.

The only scenario that would prevent the RBA from taking rates higher would be another bout of turbulence in global capital markets. If, however, risk aversion recedes, the Aussie should see another hike within the next two months. That would, in turn, attract more capital to the unit, especially from Japanese retail investors.

Meanwhile, in UK the pound saw the first bit of negative news when both Manufacturing and Industrial Production missed their marks, contracting for the first time in 5 months. The data was particularly surprising given the strong PMI Manufacturing reading reported on Monday. The drop was primarily due to a decline in transport equipment. In Euro-zone, the news from the industrial sector was unsupportive as well, with German Factory orders dropping by a whopping 7.5% on a month over month basis, but still up a healthy 9.8% on a year over comparison. However, neither currency saw any adverse impact from the news, as both were lifted by carry trade flows after equity markets rebounded.

The focus today will be on Central Bank speak as both ECB and BOE announce their rate decisions. Neither is expected to change policy, but between the two, the BOE certainly has more reason to hike as UK economy continues to perform well, while EZ is showing signs that growth in the 13-member region may have peaked.

Boris Schlossberg is a Senior Currency Strategist at FXCM.