Daily Economic Commentary: Australia

[PipDiddy]

Big ups to the Aussie for staging a comeback and pulling off the last minute win over the Greenback! After taking an early hit from weak employment data, the Aussie rallied late in the New York session with help from improved risk appetite. As a result, AUD/USD was able to close at 1.0629 after hitting an intraday low of 1.0563.

The Aussie had a difficult time overcoming the red employment change figures, but it was able to pull it off! Last month only saw a total of 7,800 jobs added, which is less than a third of what forecasts predicted.

But before you start feeling sorry for our buddies in the Land Down Under, remember that Australia’s labor market is far from weak! After all, it boasts of an unemployment rate of just 4.9%, something none of the G7 countries can do at this point in time.

Nothing on the economic calendar for Australia today! In the meantime, keep your eyes on risk sentiment!

[PipDiddy]

You can run but you can’t hide from risk aversion, Aussie! Just like all higher-yielding currencies, the comdoll fell victim to market sentiment last Friday and traded lower against the dollar. AUD/USD opened at 1.0629 and tumbled to its closing price at 1.0550.

With that, the Aussie extended its losses to 164 pips against the dollar for the week. Ouch!

Aside from Europe’s sovereign woes, the worse-than-expected trade balance report from China might have also fueled risk aversion. It was reported that Chinese exports outpaced imports by 13.1 billion USD and fell short of the market consensus which was for a 19.8 billion trade surplus. Naysayers are now starting to doubt if the Chinese economy can continue picking up the slack in U.S. growth much longer. Uh-oh…

The disappointing jobs report from Australia that we saw on Thursday might have also continued to weigh down the Aussie on Friday.

Today is a holiday in the Land Down Under so there are no economic reports on tap for the Aussie. Make sure you keep tabs on market sentiment, ayt?

Tomorrow we’ll have the NAB Business Confidence report for May along with a roster of Chinese data. A figure higher than the 7.0 reading we saw for April will probably be bullish for the currency. Make sure you don’t miss the report when it’s released at 1:30 am GMT tomorrow. Good luck!

[PipDiddy]

Who’s the champ? The Aussie’s the champ! Despite the empty economic calendar, the Aussie was able to stage a magnificent rally yesterday and close the U.S. trading session with a respectable 65-pip win versus the dollar. Hah, that’s risk appetite for ya!

Earlier today, the Aussie once again managed to rise across the charts due to a strong reading on the Chinese consumer price index (CPI). It showed that China's inflation rate is now at 5.5%, higher than the previous month’s 5.3%. Australia and China are major trading partners, so positive data from China typically helps the Australia too.

No data for the rest of the day, so look at economic releases from other major economies to dictate the Aussie’s price action. Pay special attention to the U.S. producer price index (PPI) and retail sales report at 12:30 pm GMT, as those report tend to have an indirect effect on the Aussie.

[PipDiddy]

Surf’s up forex mates! With a wave of risk appetite hitting the market, the Aussie found itself climbing up the charts! AUD/USD rose 78 pips to close at 1.0680, marking the second consecutive day of gains. Can the bulls make it three in a row today?

The Aussie got a nice boost during the New York session, as risk appetite picked up once retail sales data was released. The markets are all about risk sentiment right now baby! If we continue to see good news prop up around the world, look for the Australian dollar to be one of the major beneficiaries.

Take note that today is Wednesday, so we may see a potential midweek reversal. In fact, the Aussie is already down as I speak, thanks to a disappointing release of the Westpac consumer sentiment report. Earlier today, we saw that the index decreased by 2.6% from levels a month ago. This indicates that confidence is still wavering in the Land Down Under as the country undergoes its own recovery.

Watch out for all the data that’s coming out from the U.S. We’ve got a slew of reports coming out so we will probably see some wild moves during the New York session!

[PipDiddy]

The Aussie was driven lower yesterday as risk aversion managed to make its way back into the foreign exchange market. After it had opened the day at 1.0683, AUD/USD experience a huge sell-off and closed the day very weak at 1.0563. The pair clocked in a huge 120-pip loss.

The bout of risk aversion was bought in by none other than Greece. The emergency meeting of EU finance ministers about Greece’s bailout ended in deadlock yesterday, which led market participants to question whether the second bailout will actually go forward.

No red flags on Australia’s forex calendar today, so don’t expect any wild moves from the Aussie during the Asian and European trading sessions. However, do keep your eyes peeled when the U.S. trading session rolls along. The U.S. is scheduled to release a number of important economic reports, which could have a huge indirect impact on the Aussie’s price action.

[PipDiddy]

The Aussie chalked up another losing day against the Greenback and the Japanese yen as risk aversion loomed like a dark cloud over the markets. Still, AUD/USD was able to keep its head above the 1.0500 level while AUD/JPY closed right at 85.00. Today's set of economic reports could determine whether these support levels will hold or break.

Unfortunately, the Australian dollar won't be able to rely on data from the Land Down Under today since their economic calendar is empty. Yesterday's set of lukewarm reports from Australia, namely the MI inflation expectations and the new motor vehicle sales, probably won't be enough to support the Aussie today.

With that said, risk sentiment could drive the Aussie's price action again. Good luck and happy trading!

[PipDiddy]

Saved by risk appetite! While Australia was chillin’ like a villain with no economic reports released last Friday, a wave of risk appetite in markets cheered the Aussie into driving AUD/USD 77 pips higher than its open price at 1.0618.

One of the main reasons why high-yielding investors came out of their siestas is the easing of Greece’s debt problems. Last Friday German Chancellor Angela Merkel gave an inch against the ECB and agreed for Germany to let up its calls for participation of international banks. Hey, at least they’re getting somewhere!

Another booster for the Aussie last Friday was the rise in gold prices. Gold firmed above the psychological $1,500 per oz. mark, which turned positive for the gold-related Aussie.

Will the Aussie bulls keep their momentum this week? Though no economic reports are scheduled today, Australia will be releasing its MI leading index report tomorrow at 12:30 am GMT, with the RBA’s monetary policy meeting minutes following suit at 1:30 am GMT. Since the RBA was surprisingly dovish on its last interest rate statement, we expect the RBA minutes to be dovish as well.

The CB leading index report on Thursday at 12:30 am GMT is the last report scheduled for this week, so make sure you keep close tabs on risk sentiment! The European officials had a pretty long tea party last weekend, so all eyes will be on whether or not they’ve reached a concrete bailout plan for Greece.

If whatever they decide satisfies both the credit ratings agencies and the market junkies, then we just might see more comdoll bulls come the Aussie’s way. Watch out for that!

[PipDiddy]

The Aussie rode the risk aversion wave yesterday when the lack of progress on a possible bailout plan for Greece made the high-yielding investors jittery. AUD/USD dropped to an intraday low of 1.0497 before capping the day with only a 30-pip loss at 1.0569.

Though word got around that Russia is interested in loading up on the Aussie, it weakened against the dollar on a wave of risk aversion in markets. Apparently, traders weren’t satisfied with the euro zone officials’ lack of progress over a possible bailout plan for Greece.

Will the Aussie have its chance today? Australia’s RBA is set to release its monetary policy meeting minutes today, and given that it kept its interest rates steady at 4.75% last month, we might see some dovish statements. Still, keep your eyes peeled for any surprises!

[PipDiddy]

If there's one major currency that knows how to make a strong finish, that's the Australian dollar! AUD/USD may have been off to a weak start but it was able to recoup its losses and end 34 pips higher than its 1.0569 open price. AUD/JPY was also able to walk off with a slight gain as it closed right at the 85.00 handle.

The Australian dollar took a slight hit during the Asian session when the minutes of the latest RBA monetary policy meeting revealed that central bank policymakers weren't ready to hike rates yet. Although RBA Governor Glenn Stevens remarked that interest rates need to be hiked at some point, he estimated that GDP probably fell by 1.2% in the first quarter. Policymakers also noted that inflation is currently at the lower half of their target range, which supports their decision to keep rates steady for the meantime.

But just when AUD/USD seemed ready to break below the 1.0500 handle, improved risk appetite provided a boost for the pair. Developments in the euro zone, particularly in Greece, led traders to hope that they will find a solution for their debt problems really soon. Just check out my euro zone commentary to find out what happened in the region.

Aside from that, Fitch's warning to Uncle Sam also triggered a U.S. dollar selloff. If you wanna know the scoop, it's all in my U.S. economic commentary!

Only the MI leading index is due from Australia today and this report is only expected to have a mild effect on the Aussie's price action. Still, it wouldn't hurt to see how this could turn out, right? The index has been rising since January this year and it logged a 0.5% reading for March. If the April reading comes in higher than that, we might see the Aussie go for another rally. Stay tuned for the actual figure due 12:30 am GMT!

[PipDiddy]

Similar to other major currencies, the Aussie found itself on the back foot against the dollar yesterday due to a more upbeat FOMC statement. AUD/USD ended the U.S. trading session 1.0572, a good 79 pips lower from its intraday high.

The FOMC, which was expected by the market to just echo the previous statement, actually came in with some positive comments. It said that while growth was still weaker than expected, it would probably get better in the next couple of quarters.

It also dropped the words “subdued inflation,” which was seen by the market as a slightly hawkish stance on monetary policy. The most important takeaway from the statement, however, was the absence of signs of another round of stimulus measures (i.e., QE3).

No important economic data release from Australia today, so the Aussie’s price action will be moved mainly by news coming out of major economies. Pay particular attention to the release of the U.S. initial jobless claims (12:30 pm GMT) and the new home sales report (2:00 pm GMT)!