Daily Economic Commentary: Australia

[PipDiddy]

For the third day in a row, the Aussie posted a loss against the Greenback as AUD/USD fell 21 pips to 1.0492. Uh oh... Is this a start of a new trend?

As I had mentioned yesterday, Australia posted an improvement in the NAB business confidence report early in the day, but this didn't keep sellers from dumping the Aussie later in the day! Like its fellow comdolls, the Aussie weakened against the dollar at the sight of upbeat U.S. data... just like Superman to kryptonite!

So far, the Aussie hasn't made any moves to undo its losses yesterday as it's off to a slow start today. The downturn in the Westpac consumer sentiment report, which showed a 2.5% decline (versus the previous month's 3.7% uptick), might have had a hand in bogging down demand for the Aussie.

In a few minutes, the wage price index will be published, and forecasts have it showing a 0.8% increase in wages in June, down from 0.9% in May. If the report disappoints, it could mean just set the tone for the day and lead to more losses for the Aussie.

[PipDiddy]

Finally! A green candle! After three consecutive days of losses, the Aussie was able to buckle a poor start and eventually ended the day with a 9-pip win to close at 1.0504. Will AUD/USD now resume its uptrend?

Earlier this morning, the MI inflation expectations report was released. Apparently, consumers expect price to rise by just 2.4% over the next year, down from the 3.3% pace in June.

With inflation expectations tapering down, this gives the RBA more leeway to cut rates down the road. Take note that baseline rates now stand at 3.50%, but rates fell as low as 3.00% during the height of the recession in 2009.

No other biggies on tap for today, so we may not see any huge moves in the market. In any case, always stay on your toes and read up on my other commentaries for potential market movers!

[PipDiddy]

Woah! Surf's up, dudes! The Aussie enjoyed a fresh wave of risk appetite as it cruised higher against the Greenback and the Japanese yen in yesterday's trading. AUD/USD bounced back above the 1.0500 handle while AUD/JPY closed at 83.39.

Despite the drop in MI inflation expectations and weak data from China, the Australian dollar was able to enjoy gains against its counterparts yesterday. MI inflation expectations dropped from 3.3% to 2.4% in July while Chinese foreign direct investment slumped by 3.6%, setting off a slight Aussie selloff during the Asian session.

However, positive developments from the euro zone, namely the drop in Spanish 10-year bond yields and Merkel's promise to protect the euro, boosted risk appetite during the London and New York sessions. Mixed U.S. data also dampened demand for the U.S. dollar, allowing AUD/USD to carry on with its rally.

There are no reports due from the Land Down Under today which means that risk sentiment could drive AUD/USD for the rest of the day. Stay on your toes!

[PipDiddy]

AUD/USD bulls were in a world of hurt last Friday due to the mildly positive data from the U.S. The University of Michigan consumer sentiment survey came in better than expected, which resulted in AUD/USD selling off. The pair ended the New York trading session at 1.0423, 93 pips lower from where it was from the beginning of the Asian trading session.

Australia didn’t release any economic reports last Friday. This week, the only potential market-mover is the Reserve Bank of Australia (RBA)’s meeting minutes. It’ll publish tomorrow at 1:30 am GMT. It's important to keep an eye out for because it provides us with in-depth insights into the economic conditions that influenced the central bank’s decision on where to set interest rates.

[PipDiddy]

Quiet day of trading for the Aussie, as it was stuck in consolidation mode. AUD/USD traded within a range of just over 50 pips and eventually closed at 1.0452, up 30 pips from its opening price.

Any minute now, the Reserve Bank of Australia will be releasing its latest meeting minutes. Were our mates from the Land Down Under more hawkish or dovish with regards to monetary policy? I’ll give you guys the 411 tomorrow on what was said about the state of the Australian economy. Hang tight!

[PipDiddy]

The RBA meeting minutes gave the Aussie a huge boost at the start of the day, but a good chunk of its gains were eventually undone in the New York session. From an intraday high of 1.0521, AUD/USD retreated to 1.0475, up 24 pips on the day.

What sent the Aussie higher wasn't so much what the RBA minutes said... rather, it was what it DIDN'T say that allowed the currency to rally. Unlike its previous meeting minutes, the RBA didn't bring up the topic of a possible currency intervention, which gave traders the confidence to buy up the Aussie.

Overall, the RBA sounded chipper, saying it wasn't bothered by the recent soft reports that China has been rolling out. It also said that consumer spending is maintaining its momentum from Q2, and that the employment situation is an effect of strong growth in the resource sector.

In other news, the MI leading index printed a reading of 0.5% for the month of June, which is a decent followup to the 0.9% reading in May. But is this enough to revive demand for the Aussie today? Perhaps! But from the looks of it, Aussie bulls will need a boost from risk appetite if they want AUD/USD to revisit yesterday's highs.

[PipDiddy]

Just when everyone thought the Aussie was going to end the day in the bear lair, the comdoll pulled off a massive comeback! AUD/USD traded all the way down to 1.0414 after opening at 1.0475. Then, Aussie bulls stepped up their game and rallied to close the day at 1.0502.

There weren't any economic data released from Australia but we did have the much-anticipated FOMC minutes on tap. Luckily for the Aussie (and all the other major currencies), the minutes revealed that the Fed is actually more eager to pull the trigger on further stimulus than previously anticipated.

Our forex calendar is once again blank for reports from the Land Down Under today. We do have a few reports from the U.S. though. So make sure you keep an ear out for them as they may continue to dictate price action in today's trading!

[PipDiddy]

After three consecutive victorious days, the Aussie finally ended yesterday with a loss. AUD/USD closed the U.S. trading session at 1.0439, 62 pips lower than its opening price that day.

AUD/USD was pressured lower yesterday because of the very disappointing Chinese data. The HSBC Manufacturing PMI came in at 47.8, significantly lower than the previous month’s 49.3 reading. Moreover, China’s leading index, even though it showed a 0.7% rise for July, for June was revised down to 0.0% from 0.1%.

Australia’s forex calendar is clear as the bright blue sky today as no major report is scheduled for release. This means that the Aussie’s price action will most likely be determined by events happening in other major economies like the U.S. and the euro zone.

[PipDiddy]

Despite an upbeat speech from the RBA head honcho, the Aussie still scored its second straight loss to the dollar on Friday. AUD/USD closed the day at 1.0406 after starting the day at 1.0439.

RBA Governor Glenn Stevens might have surprised a few market junkies on Friday when he said that the central bank expects the domestic economy to pick up and counter the slowdown in the global economy. But unfortunately for the comdoll, it looks like the Aussie bulls already ran out of fuel.

Although most market junkies say that the dollar's win on Friday was nothing more than just profit-taking, you should still be on your toes. Word around the hood is that AUD/USD spiked down earlier in today's trading on rumors that the PBOC set a weak price for USD/CNY.

Our forex calendar doesn't have any data on tap from Australia today, so be sure you're on your toes for reports that could affect market sentiment. Keep in mind that the Aussie usually does well when risk appetite is up. Good luck!

[PipDiddy]

Strike three! For the third straight day, the Aussie suffered the wrath of the Greenback bulls. AUD/USD was sold-off yesterday, falling to 1.0370 after it had opened the Asian session at 1.0416.

There was no single catalyst for the sell-off so I suspect the move was simply renewed profit taking from the Aussie’s recent climb. If you look at the currency’s daily chart, you’ll see that the general trend is still up. It has only been in the last couple of days that the pair has fallen.

Whether the move down will continue or not will depend on events happening externally as Australia’s economic calendar doesn’t have anything on it. Look at data from the U.S. and euro zone bailout news to determine the Aussie’s direction today.