Daily Economic Commentary: Australia

Nope, not today Aussie bulls. Despite the strong HIA new home sales data from Australia, AUD/USD was pushed down by risk aversion in markets yesterday. AUD/USD fell from an intraday high of .9912 and closed 125 pips down from its open price. Yikes!

No other data was scheduled for release from the Land Down Under, so the Aussie traded on risk aversion brought about by the lack of significant progress on the euro zone crisis. Though Finland voted for a stronger EFSF, many investors are slowly losing confidence on the proposed solution.

Will the Aussie have any luck today? No data is scheduled for release in the next few hours, but I bet that the Aussie bulls and bears are just waiting for big news from the euro zone and the U.S. to find a direction. Whatever the case, make sure you’re around to trade the price action!

Price action on AUD/USD was as intense as my P90x workout! After rallying to its intraday high of .9879, the pair tumbled back near its Asian session lows at .9707. The bulls then took control of the pair again but the Aussie didn’t hustle enough muscle to close with a win. AUD/USD ended the day 3 pips below its opening price at .9787. Whew!

We didn’t have any economic report from Australia which probably means that the Aussie fell victim to market sentiment yesterday. It seems like the currency got sold off when Fitch cut the credit rating of Australia’s neighbor, New Zealand.

With out forex calendar still blank for high-caliber data from the Land Down Under today, make sure you keep close tabs on market sentiment, ayt? Remember that the Aussie usually rallies when risk appetite picks up.

It was another day of defeat for the Aussie last Friday as it marked its third straight day of loss versus the Greenback. AUD/USD started the day at .9785 only to find itself 109 pips lower by the end of the U.S. trading session. It fared much better versus the yen though, as AUD/JPY only fell 47 pips.

Looking at Australia’s economic calendar, we’ve got a couple of tier 1 reports coming up.

Later, at 12:30 am GMT, both the building approvals report and the trade balance will be released. The market is expecting building approvals to rise by 1.1% (a slight improvement from last month’s rate) and the trade balance to show a 2.14 billion AUD surplus (higher than last month too).

On Tuesday, at 3:30 am GMT, the Reserve Bank of Australia will announce its decision on interest rates. It is widely expected that they will keep rates at 4.75%, so any surprise cut or hike will be taken seriously by the market. Keep an ear open for the accompanying statement too folks, as the bank’s tone will be vital in determining the Aussie’s direction.

Lastly, on Wednesday, Australia’s retail sales report will print. The retail sales report is slated to show a 0.3% increase in retail sales, worse than last month’s 0.5% gain. If the actual result comes in better than expected, we could see the Aussie recover some of its losses.

Today’s a big day for the Aussie because the RBA is set to make its much-awaited monetary policy decision. Yesterday, the Australian dollar lost ground to its safe-haven counterparts with AUD/USD closing 105 pips below its .9668 open price and AUD/JPY ending 26 pips above the 73.00 handle. How will it fare today?

Fresh off the press are Australia’s building approvals and trade balance, and both reports came in stronger than expected. Building approvals were up by 11.4% in August, much higher than the projected 1.1% increase. Their trade balance landed at 3.10 billion AUD for August, better than the estimated 2.14 billion AUD surplus and July’s 1.82 billion AUD surplus.

Despite these upbeat figures, rumor has it that the RBA could be a little more dovish during their monetary policy statement at 3:30 am GMT today. Recall that, during their September statement, the Australian central bank maintained that there was no need for additional easing yet. They pointed out that, even though there were plenty of global economic threats around, Australia had a solid footing thanks to China’s strong economic performance. If the RBA expresses confidence in the Australian economy during today’s statement, the Aussie could put an end to its losing streak.

The Aussie spent most of the day sliding down the charts, but it made a last minute rally to erase most of its losses late in the New York session. From its intraday low of .9389, it flew up to close at .9542, just 22 pips below its opening price.

Surprisingly, the day actually started off on a positive note for the Aussie. Building approvals increased by 11.4% in August, more than ten times what was expected. Likewise, trade balance data exceeded expectations when it showed a surplus of 3.10 billion AUD instead of the forecasted 2.14 billion AUD.

But the celebrations were short-lived because although yesterday’s reports were positive, the RBA was anything but upbeat in its rate statement. Its decision to hold rates at 4.75% came as no surprise. What caught the markets off guard is the fact that the boys of the central bank appear to be more open to easing policy now that the outlook for the global economy has deteriorated. It seems the markets may soon get the rate cuts they’ve been expecting to see! The only thing that seems to be standing in the way of the RBA for now is inflation.

On a more positive note, retail sales seem to be improving in the Land Down Under. As it did in July, sales rose 0.6% in August, doubling the forecasted increase. Whether this will be enough to boost the Aussie’s rally is yet to be seen. It’s best to stay flexible and keep track of risk sentiment for now. Peace out and good luck, playas!

Looks like things are picking up in the Land Down Under! The sixth day turned out to be the charm for the Aussie bulls as AUD/USD closed in the green yesterday after losing ground for the past five days. AUD/USD even reached an intraday high of .9663 before closing 111 pips above its open price!

Aside from the return of risk appetite in markets, it also helped the Aussie that Australia’s retail sales showed improvement. As I mentioned yesterday, the data showed a 0.6% rise in August, which was better than the 0.3% growth that markets were expecting.

Will the comdoll continue to inch its way higher in the charts? Only the AIG construction index report at 10:30 pm GMT is scheduled for release in Australia today, so make sure you stick around for the other major reports that might affect risk sentiment, aight?

Surf’s up, dudes! The Aussie found itself going with the flow as yesterday’s bout of risk taking took it for a sweet ride. After a few wild swings, AUD/USD eventually settled 102 pips higher at .9755.

The only report released in the past 24 hours was the AIG construction index, which downgraded its reading from 32.1 to 30.0 last month. But this hardly had an impact on the markets as the Aussie continued to hold its ground. Boosted by improved risk appetite, the comdolls have been able to chalk up some decent gains lately.

Today, the economic data drought continues in Australia. But don’t worry, there’s no shortage of catalysts for big moves today! Remember, the U.S. is set to publish its NFP report, so there’s a very good chance we’ll see some action later on. Good luck, kids!

“Good but not great!” is the best way to describe the Aussie’s performance last Friday. Riding on the coattails of risk appetite early in the New York session, AUD/USD soared to a high of .9880 before tumbling down later in the day on a wave of risk aversion. By the day’s close, AUD/USD was at .9779, up just 23 pips from its opening price.

Awesome NFP figures helped prop up comdolls like the Aussie, as traders went risk hungry. However, that soon went away on news that Fitch downgraded both Italy and Spain late in the New York session.

Earlier today, the ANZ job advertisements report showed that the number of jobs being advertised dropped by 2.1% last September, marking just the 2[SUP]nd[/SUP] time this year that advertisements have dropped month-on-month.

Still, this doesn’t seem to have affected the Aussie too much, as it’s already trading above the .9800 handle. Whether this continues or not remains to be seen, but do take note that the U.S. is off on holiday today, so we could see some tighter trading conditions later.

Touchdown at parity! AUD/USD topped at 1.0016 yesterday as risk appetite surged yet again. Although the pair pulled back to close 13 pips shy of the 1.0000 mark, that was still a 250-pip rally from its .9737 open price. Will it be able to break above parity today?

Despite the decline in ANZ job advertisements for September, the Aussie was able to take advantage of the risk rally yesterday. The ANZ report showed that job advertisements slumped by 2.1% last month, following the 0.7% drop seen in August. Some say that this dismal report hints at an RBA rate cut sooner or later, but this downbeat speculation wasn’t enough to dampen the Aussie’s spirits. It even locked in a 184-pip gain against the yen as AUD/JPY closed at 76.56.

Fresh off the press was the NAB business confidence index which ticked higher to -2 in September, suggesting that businessmen are less pessimistic about economic conditions. However, the August figure suffered a slight downward revision from -8 to -9. No other reports are due from the Land Down Under today, which means that the Aussie pairs could be at the mercy of risk sentiment. Stay on your toes, everyone!

Well how about that? Parity held! The Aussie failed to make any headway above the magical 1.0000 mark and is now currently trading below the .9900 mark!

Earlier today, we received the Westpac Consumer Confidence index, which printed at 97.2. This marked a 0.4% increase from last month’s reading, but was still down nearly 17% from last October’s release. According to the head analyst of Westpac, the steady result was due to mixed feelings about recent news and the prospects of a potential rate cut.

In other news, home loans rose steadily by 1.2% in August, continuing the recent trend of positive results. This reveals that more Australian’s are getting access to home loans, which also indicates that more and more qualified buyers are buying new homes.

No biggies left on the docket for today, but do watch out early tomorrow when Australian employment data is released at 12:30 pm GMT. Word is that more than 10,000 jobs were added to the economy last month, which would be a major improvement from the previous month’s figure of 9,700 jobs lost.

Shabam! Aussie’s cruisin’ above parity again! Thanks to risk appetite, the comdoll was able to end the day 165 pips higher at 1.0159 against the dollar from its opening price. Holler!

We saw mixed reports from Australia yesterday but it seems like investors were extremely giddy about the recent developments in Europe that they just bought up higher-yielding assets. According to Westpac, consumer sentiment was lower at 0.4% in October from where it was in September at 8.1%. On the other hand, home loans for August increased by 1.2% and topped expectations by 0.1%.

Oh, and it seems like the good news doesn’t end there! Earlier, it was reported that the Australian labor market added 20,400 jobs in September, more than double the 10,100 forecast, and the unemployment rate ticked 0.1% lower at 5.2% when it was expected to have remained steady at 5.3%!

I have good feeling that if risk appetite continues to dominate price action in today’s trading, we’ll see the Aussie kick the dollar’s butt on the charts again. So get a good feel of the market’s mood, ayt? Peace!

For the seventh (yes, that’s right) day in a row, the Aussie was able to come out on top versus the safe haven dollar. Thanks to very positive labor market figures, AUD/USD was able to rally 64 pips to end the U.S. trading session with a gain at 1.0204.

The Australian employment data that was released yesterday showed that the country’s unemployment rate tapered down to 5.2% from 5.3%. It also showed that 20,400 net jobs were created, which was more than double the forecast.

No economic reports coming out from Australia today so the Aussie will probably get its direction from the upcoming tier 1 news reports from the U.S. Better-than-expected results on the U.S. retail sales report and University of Michigan consumer sentiment survey could stoke risk appetite again and provide support for the high-yielding Aussie.

The Aussie is just unstoppable! Despite the lack of economic reports from Australia, the comdoll powered through resistance areas on Friday and ended the day with a whopping 139-pip win against the dollar at 1.0343!

Aside from developments in Europe, it might have also helped that China’s inflation report came in lower than expected. The PPI for September printed 0.5% lower than theforecast at 6.5%. Meanwhile, the CPI report just printed as expected at 6.1%

Remember that Chinese demand contributes a huge chunk to the growth of the Australian economy. Now that inflation in China seems to be contained, there is one less reason for the People’s Bank of China (PBOC) to hike borrowing costs which could weigh on demand.

There are no top tier economic reports on the docket for the Aussie today so be sure to keep tabs on market sentiment!

You know how much loving AUD/USD received yesterday? Two words: diddly and squat. After its strong performance last week, AUD/USD experienced a crushing defeat yesterday. AUD/USD ended the U.S. trading session at 1.0187, a whopping 142 pips lower from its opening during the Asian session.

What brought about this sell-off, you ask?

Well, I have got another two words for that: risk aversion. German Chancellor Angela Merkel dampened the market’s mood yesterday when she said that the search for solution for euro zone’s debt problems would probably extend until next year. Needless to say, this resulted in traders rallying back to the safe havens.

Looking at Australia’s economic calendar, the only report due is the MI Leading Index at 11:30 pm GMT. Last month, the report showed a 0.5% rise, so any figure better than that could help the Aussie recover its losses.

Thanks to a wave of risk appetite during the New York session, the Aussie was able to recover its losses from earlier in the Tokyo session. AUD/USD rose over 100 pips from its opening price before finally settling at 1.0275, marking an 87-pip gain for the day.

The Aussie actually struggled earlier in the day when the latest RBA meeting minutes were released and were a little bit dovish. The minutes showed the RBA’s concern about recent developments in the global economy and how they could weigh down medium term growth. On the other hand, the medium term inflation outlook indicates that price growth should remain close to the central bank’s target of 2%-3%.

Growth concerns? Steady inflation? It’s starting to sound that the RBA is ready for another rate cut! It might be only a matter of time before the central bank finally hits the market with a rate cut, so keep a close eye out for inflation as this could be the deciding factor as to how soon the RBA will act.

In any case, the Australian dollar managed to edge higher thanks to improved risk appetite during the New York session. Risk sentiment has been the major driver in the markets lately, so keep a close eye out for developments in commodities and equities markets to help you in your Aussie trading.

Unfortunately for the Aussie, it turned out to be one of yesterday’s losing currencies. No thanks to rumors that the EFSF expansion agreement between France and Germany would no fulfill expectations, AUD/USD ended the day with a small 53-pip defeat.

The only noteworthy report that was released was the NAB Quarterly Business Confidence survey. It printed a reading of -4, opposite the positive 5 reading we saw last month. This means that conditions in the farming industry in Australia have worsened, which could negatively affect the Aussie in the long run.

No important news reports from Australia today so pay attention to reports from other major economies! Also keep tabs on euro zone EFSF talks. They have been major market movers as of late and any new developments will probably have a huge impact on price action.

It’s all about ranging mate! Just like other major currency pairs, AUD/USD stuck within its recent range, as uncertainty continues to cloud the markets. AUD/USD closed at 1.0242, up just 20 pips from its opening price.

Once again it was all about risk sentiment in the markets. With traders all jittery about what’s happening in the euro zone, it’s no surprise that we’ve been seeing a lot of weird moves lately. We can probably expect more of the same today as the markets position themselves ahead of the EU summit this weekend. Lastly, watch out for comments about EFSF leveraging and Greek bailout funds, as this could cause some whipsaws on the charts.

3-2-1… Blast off! The Aussie skyrocketed up the charts on Friday, thanks to renewed optimism on the European debt crisis. AUD/USDopened at 1.0242 and closed around its weekly high at 1.0349.

Still feeling bullish for the Aussie today? Be wary! As I mentioned in my USD commentary, European leaders didn’t really present any concrete plans during the EU Summit. Who knows, risk aversion might kick in when they fail to impress markets on Wednesday when they meet up again. Yikes!

On top of that, we also got a bit of bad news from Australia earlier. The PPI report for Q3 2011 fell short of expectations when it printed at 0.6% versus the 0.8% forecast.

Then again, perhaps there are enough good vibes in the market for the Aussie to extend its rally. Be sure to gauge market sentiment!

Somebody call Happy Pip because the comdoll bulls are out in the streets partyin’! Just like its other comdoll buddies, the Aussie gained for another day against the dollar on positive risk sentiment in the markets. AUD/USD flew by another 139 pips and closed at 1.0476.

Of course, it didn’t hurt the commodity-related currencies that China’s HSBC manufacturing PMI pointed to an expanding manufacturing industry in October after staying in the contractionary levels for past three months. As it turned out, the idea of more business from China is bullish for export-related countries like Australia and New Zealand.

On Australia’s economic front, the country’s PPI clocked in a 0.6% growth in the third quarter when analysts saw a 0.8% rise, while the CB leading index slipped by 0.1% in August.

No other reports are scheduled for release in Australia today, so make sure you keep an eye out for any news report that might affect comdoll trading!

The Aussie could use a shoulder to cry on as it lost against both the Greenback and Japanese yen yesterday. AUD/USD closed almost 50 pips below its 1.0476 open price while AUD/JPY ended at 79.20. Will risk aversion continue to weigh down the Aussie today?

Further delays in the EU Finance Ministers summit, combined with disappointing economic figures from the U.S., brought risk aversion back in the markets yesterday. On top of that, a downbeat BOC rate statement dampened the spirits of the entire comdoll gang as Governor Mark Carney expressed concern about the slowdown in the euro zone and the U.S.

Fresh off the press is the Australian quarterly CPI figure, which came in better than expected and printed a 0.6% increase in price levels. The trimmed mean CPI, however, fell short of expectations and landed at 0.3% for the third quarter of the year while the previous quarter’s figure was revised down to 0.7%. No other reports are due from Australia today so make sure you keep an eye out for any changes in risk sentiment!