Daily Economic Commentary: Australia

[PipDiddy]

Once again, the Aussie climbed to a new high at 1.0539, but finally settled at 1.0509, up just 8 pips on the day. With a shooting star forming on the daily chart, could this be the beginning of the end for the Aussie’s bullish run?

Nothing headed our way from Australia once again, but take note that Chinese manufacturing PMI figures are set for release today. The index is expected to improve slightly from 50.2 to 50.4. Because of the two country's strong trade relationship, if the report comes in much better than anticipated, it could prompt another Aussie rally today.

[PipDiddy]

It looks like the bulls have finally run out of steam. After AUD/USD had tapped a new 5-month high on Tuesday, the pair sold-off yesterday. It rose as high as 1.0543 only to find itself sitting at 1.0457 at the end of the U.S. trading session.

According to news reports, the FOMC statement was the reason behind the sell-off. The FOMC statement did not show any hint of QE3, causing traders to price out their easing expectations.

In other news, earlier today, Australia’s retail sales report and trade balance greatly exceeded expectations. Retail sales showed a stellar 1.0% growth, much higher than the 0.6% rise initially predicted. Meanwhile, the country’s trade balance showed a 10 million AUD surplus, opposite the 360 million AUD deficit forecast.

No important events left on deck for Australia but given the strong data just released, we could see the Aussie resume its uptrend. Be very careful of sentiment shifts though, as both the BOE and the ECB are scheduled to release their respective interest rate decisions later today.

[PipDiddy]

Ooomph! After it tried breaking above 1.0550, AUD/USD got rejected fast and capped the day near its 1.0456 open price. Was it all thanks to Draghi, then?

I don’t think so. The pair started climbing during the Asian session thanks to the positive trade balance and retail sales reports that we saw yesterday.

But the Aussie bears were just too hungry for pips! ECB’s Draghi’s speech served as a catalyst for a selloff in high-yielding currencies like the Aussie.

No data is scheduled for release in the Land Down Under today, but keep an eye out for any major report that could affect risk sentiment! I hear that the NFP report at 12:30 pm GMT usually inspires crazy volatility.

[PipDiddy]

Cowabunga! The Aussie continued its cruise up the charts as it extended its gains against the dollar on Friday. After opening the day at 1.0456, AUD/USD finished the week at 1.0559.

There weren't any economic reports from Australia. However, positive vibes were aplenty on Friday thanks to the better-than-expected NFP figure which sparked risk buying.

Today, we don't have any top tier data from the Land Down Under. But brace yourselves, folks! Early morning tomorrow, at 5:30 am GMT, the RBA will take the spotlight and announce its rate decision. The general consensus is for the central bank to keep rates steady. However, according to Forex Gump, it would be worth your while to keep an ear out for the RBA's statement just in case the bank drops hints on future monetary policy decisions.

If central bankers in the Land Down Under sound more hawkish, we could see the AUD rally. However, if they sound more dovish, the comdoll could trade lower.

[PipDiddy]

There’s no stopping this superstar! While the other high-yielding currencies levelled off against the Greenback, AUD/USD had risen to a new four-month high near 1.0600 before it capped the day with a 9-pip gain. What the heck is happening in the Land Down Under anyway?

Australia’s MI inflation gauge and its ANZ job ads data might have contributed to the Aussie bulls’ party. The inflation report showed a 0.2% growth in July after slipping by 0.2% in June, which lessens the possibility of another RBA rate cut. Meanwhile, the job ads data came in at -0.8% in July, which is a better reading than the 1.1% downtick that we saw in June.

In a couple of hours the RBA will take center stage as it announces its interest rate decision. Market bees are buzzing that the central bank will keep its rates steady at 3.50%. Apparently, RBA’s Stevens' speech about Australia being a “Lucky Country” implied that the central bank is adopting a wait-and-see mode this month.

Will the RBA provide fireworks in the comdolls’ price action? Stay tuned at 4:30 am GMT as the central bank announces its decision!

[PipDiddy]

An upbeat RBA statement gave Aussie pairs a strong boost during the Asian session but these gains were gradually erased as the day dragged along. AUD/USD hit a high of 1.0604 before closing at 1.0548 while AUD/JPY closed 6 pips below the 83.00 handle.

The RBA left rates unchanged at 3.50% as expected during their monetary policy statement and pointed out that economic growth was in line with their estimates. RBA Governor Glenn Stevens also noted that external risks are less serious than before, hinting that there might be no need to adjust monetary policy later on.

Only the home loans report is on the Land Down Under's schedule today and the actual data fell short of expectations. Home loans climbed by only 1.3% in June, less than the consensus of a 2.1% rise, but the May figure was revised up from -1.2% to -0.9%.

[PipDiddy]

Due to some very good data, AUD/USD has managed to find solid support in the last 24-hours. The pair is currently trading around 1.0590, 40 pips higher from where it was during the previous Asian trading session.

Australia’s employment report showed that the number of people employed has risen by 14,000, almost one and a half times the market had initially expected. In addition, the jobless rate was reported to have fallen to 5.2% from 5.3%.

No economic data left on Australia’s economic cupboard today, but we will see the complete details of the RBA Monetary Policy early tomorrow at 1:30 am GMT. We all know that the central bank has kept rates unchanged, but it’ll be interesting to see why the bank chose to do what it did. Stay tuned for that.

[PipDiddy]

Uh oh, it looks like someone is running out of steam… After the pair’s impressive rally in the last couple of weeks, it seems that AUD/USD has decided to take a break. Save for the small spike up during the Asian session due to the positive employment report, the pair generally moved sideways yesterday with resistance around the 1.0600 major psychological barrier and support just a few pips above 1.0550.

As I mentioned yesterday, the country’s employment report came in significantly better than expected. The number of people employed was reported to have jumped by 14,000 and the unemployment rate fell to 5.2% from 5.3%.

Australia doesn’t have any big reports scheduled today but watch out for any external events that could cause a sentiment shift. At 12:30 pm GMT for instance, Canada will be publish its employment report. If it comes in better than expected, the Aussie could be indirectly affect and rally.

[PipDiddy]

It took a painful beating in the first half of the day, but the Aussie staged a marvelous comeback in the New York session to erase most of its losses. After trading as low as 1.0497, AUD/USD closed at 1.0575, just 4 pips below its opening price.

All eyes were on the RBA monetary policy minutes at the start of the day, which saw the RBA upgrade its growth forecast for 2012 from 3.0% to 3.5%.

But the minutes also highlighted risks to the economy, such as those stemming from the European debt crisis and rising commodity prices. And more importantly, it revealed that has become uncomfortable with the levels at which the Aussie has been trading.

To make matters worse, weaker-than-expected trade balance data from China (which happens to be Australia's largest trading partner) pulled down the comdolls early in the day. But the Aussie's strength prevailed and it was able to stage a solid rally as risk sentiment improved.

Looking ahead, we don't have any tier 1 reports on the economic docket this week. That being the case, I wouldn't be surprised to see the Aussie just continue dancing to the beat of risk sentiment this week.

[PipDiddy]

Ooomph! After stalling near the 1.0600 area last week, AUD/USD finally gave in and dropped by 47 pips to 1.0513. What the heck happened in the Land Down Under?

There were no economic reports released from Australia yesterday, but the Aussie bulls ended up taking profits after uncertainty in the euro zone dominated the price action of high-yielding currencies. Word on the hood is that the approval of the ESM would be delayed, which could limit the ECB’s options in intervening in the bonds market.

Will the reports released today help the Aussie gain back some pips on the Greenback? The NAB business confidence data released a couple of minutes ago came in at a reading of 4, which is a lot better than the -3 reading that we saw last month. Meanwhile, the new motor vehicle sales clocked in at -0.8% in July, which is a bit better than the -1.0% slip that we saw in June.

No other reports are scheduled for release in Australia today, so pay attention to news reports from the other major economies! Who knows, there might be a game changer there somewhere!