Daily Economic Commentary: Australia

Looks like the fourth time is the charm for the comdoll! AUD/USD broke its losing streak yesterday on a covering of short positions during the Thanksgiving holiday. The pair reached an intraday high of .9786 before it finished the day 37 pips higher than its open price. Boo yeah!

No economic reports were released from the Land Down Under yesterday, but many say that the currency bulls took advantage of the Thanksgiving holidays to take profits on their short positions on the high-yielding currencies. This is probably why the high-yielding Aussie still managed to bag some pips despite the onslaught of bearish reports in the euro zone.

The economic boards are once again empty in the Australia today, but make sure you keep close tabs on any economic reports in the other major economies that might affect risk sentiment!

Down goes the Aussie! With risk aversion dealing heavy blows to high-yielding currencies, the Aussie had a difficult time finding buyers. When all was said and done, it finished 31 pips lower against the Greenback, with AUD/USD ending the week just a hair below the .9700 handle.

No surprises here! Once again, AUD/USD price action was heavily dictated by risk sentiment. Unfortunately for the Aussie, with risk aversion back in style, the odds were tilted heavily against it.

We don’t have too many reports scheduled for release this week. The highlight of the week will probably be the retail sales report, which is due on Thursday. But to be honest, few are expecting fireworks from this report. Forecasts have it printing a 0.4% month-on-month increase, just as it did in September.

Until then, risk sentiment will probably continue directing AUD/USD, so be sure to keep tabs on developments in the euro zone!

What a beautiful start to the week! After gapping up over the weekend, the Aussie tore up the charts, rising to as high as .9977 before settling for a 79-pip gain and finishing at .9901.

The reason for the Aussie’s total ownage? Risk sentiment!

With risk-taking picking up, comdolls like the Aussie were some of the biggest winners yesterday. With no data on tap for today, we can probably expect risk sentiment to continue to be the major driver of Aussie trading. Make sure you keep an eye out for any developments, especially in Europe, as you never know what might be the catalyst for a strong move in the markets.

Just when debt rating downgrades are being doled out here and there, Australia enjoyed a nice UPGRADE from rating agency Fitch. This was enough reason for AUD/USD to rally by more than 120 pips up from its .9901 open price. AUD/JPY also ended the day in the green as it closed 6 pips above the 78.00 handle.

In stark contrast to the euro zone’s downgrade-fest, Australia got a debt rating upgrade from AA+ to AAA from Fitch. The credit rating agency pointed out that Australia had a strong fundamental standing, as well as stable political and social institutions, which was why they deserved to hold a top rating. Aside from that, OECD also noted that the Australian economy is relatively safe from the current global economic threats, such as the euro zone debt crisis. In fact, they estimated that the Australian economy could grow by 4% in next year before slowing to 3.2% the following year.

Fresh off the press are stronger than expected economic data from Australia. The HIA new home sales figure showed a hefty 5.5% increase for October, making up for the 3.5% dip seen last September. Private capital expenditure also showed a strong improvement for the third quarter as it logged in a 12.3% increase, nearly twice as much as the second quarter’s 6.2% rise.

There aren’t any economic reports due from Australia for the rest of the day, which means that the bullish sentiment for the Aussie could carry on. Unless there’s a significant shift in market sentiment, that is! Bear in mind that the U.S. is set to release a bunch of red flags today and these could be enough to trigger a midweek reversal. Be careful out there!

Make that three for three! On the strength of overall risk appetite, the Aussie dominated the charts yesterday, marking its biggest rise in over a month. AUD/USD climbed a whopping 258 pips to close at 1.0284.

However, the Aussie has given back some of those gains this morning, as we just got some pretty disappointing building approvals and retail sales figures. Building approvals dropped by 10.7%, after it was expected that they would rise 3.6%. Meanwhile, retail sales came in worse-than-expected, printing a small 0.2% increase, as opposed to the expected 0.4% uptick.

Nothing on tap for the rest of the day, but make sure to keep an eye out on risk sentiment as this is clearly the major driver in the markets right now.

Aha! It seems like Aussie bulls got tired after the sPIPtacular rally we saw from the currency on Wednesday. Yesterday, AUD/USD ended the day 63 pips below its opening price at 1.0221.

Aside from the lack of any developments from the euro zone, the Aussie also didn’t get any boost from the top-tier economic reports that were released from Australia yesterday. The building approvals report for October printed a 10.7% decline and disappointed expectations which was for a 3.6% uptick. On top of that, the retail sales report for the same month came in lower at 0.2% than the consensus. Consumer spending was predicted to match its previous level for September at 0.4%.

Our forex calendar is blank for reports from The Land Down Under today. But we do have the much-anticipated NFP report for November on tap today. Head on over to my USD commentary to know how to better anticipate the report. Just remember to gauge market sentiment and keep in mind that the Aussie usually rallies in times of risk aversion. Good luck!

AUD/USD was still locked up like Lindsay Lohan in its range during yesterday’s trading. After testing support around 1.0200, the pair traded higher to peak just around the top of its consolidation at 1.0305 before ending the day 13 pips above its opening price at 1.0268.

As I mentioned on my EUR and USD commentaries, risk appetite boosted higher-yielding currencies early on in the day. Consequently, the improvement in market sentiment must have allowed the Aussie to hustle some muscle despite the mixed reports we saw from Australia.

It was reported yesterday that the AIG services index for November was lower at 47.7 than the 48.8 reading we saw for October. On the other hand, we saw an improvement in ANZ job advertisements when the report for November came in flat after printing a 0.6% decline in October.

Hmmm, but perhaps the pair was unable to break away from the range because investors are waiting for the RBA interest rate decision which is due at 3:30 am GMT. Keep in mind that most market junkies are expecting the central bank to cut rates by 25 basis points to 4.25%. If we do hear a rate cut, AUD/USD could break below its range. However, if the RBA holds back, the Aussie may just rally back up to 1.0400 so be on your toes!

AUD/USD’s price action yesterday could be best represented by the letter “U” as it fell early during the Asian and European session but recovered sharply once the U.S. session rolled along. It ended the day at 1.0246, a small 35-pip loss from its opening price.

Like other major currency pairs, AUD/USD’s crazy price action reflected the shifting market sentiment. At first, the market was pessimistic due to the news that the S&P warned the market of multiple downgrades in Europe.

The pair also received a hit when the Reserve Bank of Australia (RBA) fulfilled forecast and cut the country’s cash rate by 25 basis points. Then, sentiment recovered when European leaders said that they’re hoping to reach a long-term solutions for Europe’s debt problems in the upcoming EU summit.

On the economic front, earlier today, the country’s GDP report was published. It came just as expected and showed a 1.00% growth.

Later today, Australia’s employment report will print. The market is expected the report to show 10,6000 net additional jobs were created and that the unemployment rate remained at 5.2%.

It’s starting to look like 1.0300 is the line-in-the-sand for the Aussie this week! Once again, the pair failed to trade above the key psychological level and remained within range. What will it take for the Aussie to bust out of its recent consolidation?

The Aussie is already off to a bad start this morning, as Australian employment figures came in worse-than-expected. About 6,300 jobs were lost last month, while the unemployment rate rose slightly from 5.2% to 5.3%. Companies remain pessimistic about the state of the global economy and are responding by delaying any hiring or even reducing staff.

No other data on the docket today, but be careful trading during the London session as we have some red flags coming up from other countries during that time. Good luck trading today!

After a couple of days being confined in a 50-pip range, AUD/USD went wild yesterday! The pair broke out of consolidation and surged to a high of 1.0380 before sliding back down and closing at 1.0159. Meanwhile, AUD/JPY sank nearly a hundred pips from its 79.83 open price.

Australian employment data came in way weaker than expected as it printed a 6.3K decrease in jobs instead of the estimated 10.3K increase. This disappointing jobs figure was enough to bring their jobless rate up from 5.2% to 5.3% in November.

The poor jobs data wasn’t the main reason for the Aussie’s tumble though. In fact, the pair was able to keep its head above the 1.0250 minor psychological level until the middle of the London session. But when the ECB made its rate statement later on, volatility returned and pushed AUD/USD this way and that. To find out how the rate decision turned out and what ECB head Mario Draghi said, tune in to my euro zone economic commentary!

No other reports are due from Australia for the rest of the day, but bear in mind that data from China just came in weaker than expected. Their CPI landed at 4.2%, lower than the predicted 4.6% reading and the previous 5.5% figure. Their PPI also missed expectations as it printed a 2.7% increase, lower than the estimated 3.3% rise. With Australia’s #1 trading buddy undergoing a slowdown, the Land Down Under’s export industry could be in trouble as well.

Whew, that was a close one! Since no economic reports were released from the Land Down Under last Friday, the Aussie traded mainly on risk sentiment in the markets. After plunging to an intraday low of 1.0048, the Aussie bulls fired up and pushed AUD/USD to close 57 pips higher than its open price.

As I mentioned in my EUR writeup, optimism on the EU Summit agreements supported risk appetite near the end of the week. The question is, will the Aussie continue to trade on sentiments in the euro region, or will Australia’s less-than-spectacular economic reports finally weigh on the high-yielding comdoll?

Just when the Asian session traders are having their first coffee cups earlier today, we saw Australia’s home loans data clock in a 0.7% growth in October. It might be a bit lower than September’s 1.9% growth, but it’s still higher than the expected 0.1% increase. Meanwhile, the country’s trade surplus narrowed down to only 1.60 billion AUD in October after showing a 2.25 billion AUD surplus in September. Uh-oh.

Tomorrow at 12:30 am GMT we’ll see the NAB business confidence report together with the quarterly housing starts figures. Then, at 11:30 pm GMT we’ll get hold of the Westpac consumer sentiment readings for December. Around the middle of the week there aren’t any major reports scheduled for release, at least not until Thursday 12:00 am GMT when the MI inflation expectations and the new motor vehicle sales is due.

Make sure you watch your comdoll pairs closely, aight?

No thanks to the deadly combo of bad data and risk aversion, the Aussie plunged head first into the bear lair yesterday. AUD/USD opened at 1.0202 and tumbled down the charts to close the day at 1.0076.

As I discussed in my USD and EUR commentaries, Moody’s warning about possible downgrades for some EU countries sparked risk aversion and sent higher-yielding currencies lower. It also didn’t help the Aussie that Australia’s trade balance report showed that exports outpaced imports only by 1.60 billion AUD and came in lower than the 2.03 billion AUD surplus that the market was eyeing.

On the bright side of things, it wasn’t all bad news for the Aussie. Growth in home loans for October was actually seven times more than the forecast at 0.7%. Also, earlier we saw that the NAB business confidence index for November matched its previous reading of 2.0.

Now, if you’re planning to trade the Aussie today, keep tabs on the reports we have from the U.S. as they would probably dictate the currency’s fate on the charts. Good luck!

Risk aversion was the theme of the day yesterday, and the high-yielding comdolls aren’t exempted from the selloff. AUD/USD ended up falling for a second day in a row, sliding 71 pips to 1.0006 after dipping to an intraday low of .9980.

I detailed the possible reasons for yesterday’s risk aversion on my USD writeup, but we all know that it didn’t help the comdoll that Australia’s own economic reports disappointed expectations.

The NAB business confidence data printed a 2 reading in November, but the quarterly housing starts surprised to the downside with a 6.8% fall when market geeks were only expecting a 0.1% slip. Heck, even the Westpac consumer sentiment failed analysts’ expectations when it showed an 8.3% decline in December against the 6.3% rise in November. Yikes!

No major reports are scheduled for release in the Land Down Under today, but make sure you stay glued to the tube for any news that might affect sentiment for the high-yielding comdolls!

And the Aussie is back to the land down under! Down under parity, that is. AUD/USD sank below the 1.0000 mark and closed at .9908 as risk aversion trolled the markets yesterday. How low can the Aussie go?

Australia didn’t release any top-tier reports yesterday, leaving the Australian dollar at the mercy of risk sentiment. Without any hard-hitting data on schedule, traders decided to focus their attention on the ongoing euro zone debt crisis, causing higher-yielders to lose further ground.

There aren’t any major reports due from Australia today so y’all better keep close tabs on the release of Chinese manufacturing PMI. Recall that the index dipped back below the 50.0 mark in November and was revised down from 48.0 to 47.7. Another figure below 50.0, which would indicate that the Chinese manufacturing industry contracted again, could also be negative for the Aussie. Keep an eye out for that report due 2:30 am GMT today.

It appears that the the Aussie bears have finally run out of fuel as they were unable to take AUD/USD lower for another day yesterday. The daily chart shows a nice little doji, indicating that neither the bulls nor the bears were in control. With the Aussie below parity, will we see the bargain hunters start buying the pair again?

That’s a tough question to answer for now, so let’s wait and see how the Aussie reacts for the next day or two before coming to a conclusion. Moving on, it appears that Australia’s economic cupboard will be completely empty today since no data is scheduled for release. This means that Aussie will be primarily be driven by reports coming out of other major economies.

Despite the rebound in risk appetite last Friday, AUD/USD was unable to land back above parity as the 1.0000 held as strong resistance during the day. Still, the pair managed to close 58 pips above its .9914 open price.

Even though Australia didn’t release any economic reports last Friday, Aussie pairs managed to stay afloat as risk appetite improved then. Let’s find out whether this sentiment could carry on this week or not.

Today, Australia is set to release its CB leading index at 11:00 pm GMT. Recall that the index climbed by 0.1% in September after four consecutive monthly declines. Another uptick for October could give the Aussie a good boost.

On Tuesday, the RBA will release the minutes of their latest monetary policy meeting. Recall that the central bank slashed interest rates by 0.25% for the second time this year during their December rate statement. Although this move was widely expected, the minutes of their meeting could reveal a lot about their next monetary policy decisions and whether we’ll see more rate cuts next year or not. Make sure you keep an eye out for that!

No other reports are due from the Land Down Under for the rest of the week, which means that the release of the RBA meeting minutes could be the biggest mover for Aussie pairs. If you’re planning to trade the news, make sure you do your research and set those stops right!

It was a bad day to be a comdoll yesterday as the markets weren’t on a risk-taking mood! As a result, the Aussie was dumped by traders and AUD/USD closed 102 pips lower at .9888. Will today’s monetary policy meeting minutes provide it with support?

With the markets on risk-off mode, the Aussie had a difficult time finding buyers. It pretty much had no chance, really.

However, today it’s looking a bit more lively! Maybe it’s because the CB leading index just came out and printed a nice increase. The index rose 0.6% in October to follow up September’s 0.6% rise. But keep in mind, September’s figure was actually revised up from 0.1%, so that added to the overall good vibes!

As for the monetary policy meeting minutes, it seems to be making traders happy! The central bank noted that recent data has been mixed, but overall, it says that it’s still stronger than what was saw in the middle of the year.

Recent construction and capital expenditure data have been hinting at strong growth in business investment across several industries. Adding to the good news, members of the RBA said that business confidence has been picking up in the past couple of months, just as retail sales has been rising at a moderate pace.

On the downside, the unemployment rate (5.2%) is still half a percentage point higher than earlier this year. Also, studies show that households are still pessimistic about their financial status and that the housing market is still weak.

With no more reports on tap for today, it seems we’ll have a lot of time to ponder on these words. So far, traders seem to be taking it well. At this pace, it looks like AUD/USD may revisit parity within the day. Keep your eyes on this pair, kids!

Up, up, and away! Thanks to a surge in risk appetite, AUD/USD broke above parity like it was bullet on tissue paper, and ended the day 186 pips away from its open price at 1.0074. Whooo!

The RBA set the tone for Aussie trading early in the Asian session when it released its minutes for the December monetary policy decision.

The RBA was a bit more optimistic in its minutes than analysts had expected, as the central bank believes that a change in interest rates depends on the euro zone crisis and not on the local economy.

It also helped that risk appetite was surging everywhere else in the markets. As I have indicated in the other currencies’ write-ups, positive reports from the euro zone and the U.S. helped prop up risk appetite.

No economic reports are scheduled for release in the Land Down Under today, but don’t even think of leaving your screens! The currency bears can snap up the bulls’ gains if a huge market-moving report suddenly changes the markets’ tone!

Stay sharp in your trades, kids!

The Aussie gave about as good as it got as it ended almost unchanged against the Greenback yesterday. After reaching an intraday high of 1.0220, AUD/USD came falling back down to end the day just 18 pips higher at 1.0093. What’s in store for the Aussie today?

With the ECB announcing that it’ll deal out big loans to European banks, the risk rally that saw AUD/USD climb 186 pips on Tuesday came to a halt. Is risk sentiment beginning to turn sour again? It’s definitely possible! High-yielding currencies such as the Aussie had difficulty finding buyers in the London and New York sessions, and the Greenback found itself at the top of the food chain. These are conditions that we normally see when risk is off. Yikes!

Sadly, we won’t be getting any more reports from Australia before Christmas, so it looks like we’ll have to continue tracking developments in other countries in the meantime. Good luck trading, kids!

The Aussie bulls went to work early and it looks like it paid off, as they were able to sustain their gains throughout the day. AUD/USD closed 38 pips higher at 1.0130, marking the third day in a row that the Aussiefinished higher.

Can the Aussie bulls finish off the week with another victory?

If you ask me, I don’t expect too much volatility in the markets, especially with the holidays right around the corner. Don’t expect too much volatility, but remain cautious, as thin liquidity may lead to some wild moves in the market.