The Aussie closed mixed in yesterday’s trading due to the lack of economic flows in Australia. The AUDUSD incurred a modest lost and fell at 0.8754 from 0.8778. The AUDJPY, on the other hand, rose slightly to 78.73 from 78.67.
China’s trade balance unexpectedly shrunk to 14.2 billion CNY from 18.4 billion. Its imports over the month showed a whopping 85.5 % gain, most of which were sourced from Australia. The result, however, had a very negligible impact on the Aussie.
Earlier today, both Australia’s employment change and unemployment rate in January caught the markets off guard with a surprise upside. Firms added 52,700 jobs in January which is about four times of the 15,100 estimate, bringing the nation’s unemployment rate down to 5.3% from 5.5%. The unexpected improvement in these accounts spurred some speculations that the RBA will hike its rate on its next meeting. The Aussie, as a result, soared following the report.
Still due later are China’s y/y CPI and PPI figures. China’s CPI is seen to have reached 2.2% from 1.9%. Similarly, the country’s producer prices are projected to have jumped by 3.9% over the period from 1.7%. An increase in China’s inflation figures could be detrimental for the AUD since it could prompt the Chinese officials to do another round of tightening measures. Doing so, of course, would limit business activity and trade.
Thanks to strong results on Australia’s employment situation report, the Aussie managed to cover a significant amount of ground yesterday. The Aussie closed the US session at 0.8902, almost 150 pips from its Asian session opening price.
Australia’s cupboard today is empty so traders will most likely be turning their attention to news coming out of other nations, most notably the US retail sales report later. If it comes out better-than-expected, we could see the AUD tumble down to 0.8800 again.
After hitting levels it hadn’t reached since last September, the Aussie bounced back last week, posting a nice gain versus the dollar on the strength of good employment figures. The AUDUSD pair finished almost 200 pips higher to close the week at 0.8870.
The Aussie actually almost gave up much of its gains after news broke out of China that the BOC (that’s Bank of China mind you) would be raising reserve requirements another .50%. Now if you’ve been paying attention in class, you’d know that China has been making moves to help curb growth. Take note that extraordinary growth can easily lead to a spike in inflation, which is what China wants to avoid. With China being one of Australia’s main importers, any moves that are made to curb growth would most likely lead to bearish sentiment towards the Aussie dollar.
Tomorrow, the minutes of the last monetary policy meeting will be available at 12:30 am GMT. It’ll be interesting to see what was discussed in their meeting to decide upon keeping interest rates at current levels.
Also due tomorrow is the NAB Business Confidence index. The index had a reading of 8 last month, down from a score of 19 in December. With the outlook of the economy looking a little less bright nowadays, can we expect another fall in the index?
Yawn… Yesterday was a slow trading day for the Aussie since Australia didn’t release any economic reports and most US traders were off on a President’s Day holiday. The AUDUSD managed to keep its head above the 0.8850 level as it edges closer to the 0.8900 handle.
The freshly released NAB business confidence index indicated that business sentiment improved in January. The indicator climbed from 8 to 15 during the month, boosted by increased hiring and low interest rates. However, other components of the index showed that some business conditions actually worsened in January. The index of forward orders, which measures future demand, slumped into negative territory from 11 to -4. Trading conditions also deteriorated by 14 points while profits dropped by 10 points.
Meanwhile, minutes from the latest RBA meeting explained the central bank’s wait-and-see stance in terms of monetary policy. Recall that the RBA shocked the markets earlier this month when they paused with their rate hikes. According to RBA officials, the reason behind this move was that they were seeing strong signs of economic recovery and that they first needed to assess the impact of the earlier rate hikes. Also, the policymakers mentioned that the succeeding rate hikes probably won’t be as aggressive as the ones we saw during the last quarter of 2009.
No other economic reports are due from Australia today but keep an eye out for RBA Assistant Governor Dr. Guy Debelle’s speech at the Women in Finance Luncheon in Sydney. Although this speech is slated to have a minimal effect on the Aussie’s price action, his comments on matters concerning financial markets could serve as hints on future monetary policy.
Technically speaking, things are looking up for the Aussie right now. For one, the AUDUSD just broke out from an inverted head and shoulders formation to close at 0.9019 from 0.8889. Similarly, the AUDJPY rose to and settled at 81.31 from 79.98.
RBA Assistant Governor Dr. Guy Debelle said in his speech at the Women in Finance Luncheon in Sydney that there are still some downside risks in the banks’ loan books. While this may negatively affect the global economy’s expansion, the growth in Asia, could in a way, carry everyone else.
During the US session, the 3.9% increase in crude oil prices carried the overall equities markets to their highest single session gain in three months, benefitting the higher yielding currencies like the Aussie as well.
Earlier today, Australia’s Westpac leading index showed a growth of 0.5% in December. While an expansion in this account usually reflects positively in Australia’s economy and the Aussie, the result had a very minimal impact on the Aussie’s short term valuation.
No other economic reports are due in Australia today. The US, however, will release its January housing starts and building permits tally. Housing starts are seen to have added another 580,000 units on top of the previous month’s 560,000 count. New building permits for the same period are likewise seen at 630,000. Strong numbers in these accounts could support yesterday’s market rally, which would be bullish for the likes of the Aussie again.
No thanks to the hawkish FOMC meeting minutes and better-than-expected data from the US, the AUDUSD tumbled down a couple pips in yesterday’s trading session. The AUDUSD found itself sinking under the 0.9000 handle by the end of the US session.
No important economic data came out of Australia yesterday but watch out for a speech by RBA Governor Glenn Stevens at 10:30 pm GMT later on. He is set to talk in front of the parliament about the status of the economy. Currency traders will be keeping an ear out for this one because it might provide some clues on the possible changes the RBA might do on its monetary policy.
If you are a Aussie bull, then you probably had a bad morning. With the surprise announcement by the Fed, the AUDUSD came tumbling down and is now sitting just above 0.8900 – a fall of about 100 pips!Talk about waking up on the wrong side of the bed!
Late last night, Reserve Bank of Australia Governor Glenn Stevens said that growth in the Australian economy may come, but probably at the expense of rising inflation. He said that with rising risk of inflation, that the RBA must act quickly in order to contain it. Keep in mind that after a series of rate hikes, the RBA decided against raising interest rates earlier this month. If we do see more signs of improvement in the coming weeks, it may entice the RBA to hit the market with a rate hike in March.
After tiptoeing around the 0.8900 handle, the AUDUSD mustered enough strength to recover from its recent losses last Friday, despite the lack of Australian economic data on tap.
This week holds a bunch of minor economic reports from the Land Down Under. Today, we have data on new motor vehicle sales due at 12:30 am GMT. This report could show that sales of new motor vehicles grew again in January, following a strong 3.3% increase in December.
Australia won’t be releasing any economic reports on Tuesday but watch out for RBA Deputy Governor Ric Battellino’s speech at 7:00 am GMT. His speech could contain hints on the future monetary policy moves by the central bank so better stay tuned for that!
Wednesday’s agenda has a report on construction work done and the wage price index. Construction work done is estimated to increase by 2.1% in the fourth quarter of 2009, after climbing by 2.2% in the previous quarter. Meanwhile, the wage price index is expected to rise by 0.8% in the fourth quarter. These reports are due at 12:30 am GMT.
Data on private capital expenditure for the fourth quarter of 2009 is due Thursday 12:30 am GMT. After seeing a 3.9% decline in the third quarter, private businesses are expected to have increased their investments by 1.5% in the next quarter. Since this economic indicator is slated to have a huge impact on the quarter’s GDP, plenty of traders are watching out for the actual release so better take note of it too!
Lastly, on Friday, Australia will release data on private sector credit at 12:30 am GMT. The report could show that credit rose by 0.2% in January, after printing a 0.3% increase in December. A better than expected figure should indicate that consumer spending remains strong, boding well for the entire Australian economy.
Things looked promising for the aussie yesterday when it gapped up against the greenback to begin the Asian session. Trading, though, turned flat and the AUDUSD eventually lost its luster to close the session in red.
Trading was flat for the aussie yesterday given the lack of economic flows in Australia and the US.
Today (7:00 am GMT), RBA Deputy Governor Ric Battellino will deliver a speech at the Clayton Utz Seminar in Sydney. He could drop some clues regarding the central bank’s future moves in his speech so watch out. Any hawkish statements could give the aussie some lift.
Risk aversion came back in full force when doubts on the sustainability of the global economic recovery resurfaced yesterday. The Aussie, after hitting an intraday high of 0.9072, found itself more than 150 pips lower at 0.8914 by the end of the US trading session.
The news that the top four banks of Greece have had their credit ratings downgraded yesterday gave risk aversion a chance to shine, forcing currency traders let go of the high-yielding Aussie.
The next important data to watch from Australia is the CB leading index for December at 11:00 pm GMT today. The CB leading index, which is a combined reading of seven economic indicators (some previously released), predicts the direction of the country’s economy over the next six months. A positive reading would be beneficial for the Aussie, especially since the report has been treading the negative territory for two months now.
Following at 12:30 am GMT, the private capital expenditure report for the final quarter of 2009 will be released. The report measures the quarterly change in investments made by business. Currency traders usually see rising capital expenditure as bullish for the Aussie because increased business investment could stimulate economic activity and lead to growth. The forecast is an increase of 1.5%, opposite the 3.9% decline seen during the third quarter of 2009.
Despite the rebound in Australian private capital expenditures for the fourth quarter, the Aussie fell victim to risk aversion. After lingering in the 0.8950 level for a bit, the AUDUSD dropped to the 0.8800 area during the US session.
Business investment in Australia printed a 5.5% increase during the last quarter of 2009, supporting speculations of an interest rate hike for next week. Higher demand for Australia’s iron ore, coal, and gas spurred an improvement in investment, particularly for the mining industry. As a result, the AUDUSD surged to the 0.8950 area but it wasn’t able to hold on to its gains for long.
Weak US economic figures, such as durable goods orders and initial jobless claims, sparked a flight to the safe-havens. Would this behavior continue today? Freshly released data from Australia, namely the private sector credit report which printed a 0.4% uptick, could help keep the Aussie afloat. However, more US dollar buying could ensue if top-tier reports such as the US preliminary GDP and existing home sales come in weaker than expected.
The aussie was able to close the month of February on a positive note against the greenback and yen. The AUDJPY rose back up to 79.20 after hitting a low of 78.19 during the last week of Feb. Similarly, the AUDUSD rallied to 0.8963 after reaching a low of 0.8801 during the same period.
The aussie’s rebound to end last week’s session could have been due to some profit taking from those who had shorted it.
The month of March kicked off awhile ago with the release of Australia’s HIA new home sales in January and current account balance for the fourth quarter of last year. New home sales soared by 9.5% in January after dipping by 1.1% in December. The country’s trade deficit, on the other hand, came in slightly worse at –A$17.5 billion versus the –A$17.3 billion estimate. Though, its reading during the previous quarter was positively revised to –A$14.7 billion from –A$16.2 billion.
The aussie gained a little bit of support following the report.
Tomorrow, all eyes will be on the RBA’s interest rate decision. The RBA is expected to raise its interest rate again to 4.00% from 3.75% due to the improvement in Australian retail sales, business confidence, house prices, and employment. It would be the central bank’s fourth rate hike in 4 months if it chooses to do so. Of course, the aussie would get a lot of lift if it does.
Another heavyweight report in the form of the country’s 4Q GDP is due on Wednesday. Australia’s economy is seen to have grown by 0.9% during the last quarter of 2009 on top of the 0.4% expansion that it had during the previous period. A growth in this account would reflect positively on the economy and the AUD.
On Thursday, Australia’s January trade balance will be reported. The country’s trade deficit is projected to have improved to –A$1.57 billion from –A$2.25 billion. Net exports is one of the major components of Australia’s GDP. Hence, a recovery in this account would directly add to country’s overall output. Such could then give the AUD some lift as well.
The Aussie started out the week on a slow note yesterday, bouncing off its intraday highs and lows. The Aussie ended the US session a couple of pips above the 0.9000 handle, just 50 pips higher form its week open price.
Earlier today, Australia released some mixed economic data, which caused a bit of volatility on the Aussie.
The January building approvals report, which measures the monthly change in new construction permits issued, showed a huge 7.0% drop, a significant difference from the 0.7% growth initially expected. Falling permits are typically seen as a sign of a weak construction industry because getting permits is one of the initial steps in constructing buildings.
Retail sales, on the other hand, came out with a positive surprise. It showed that sales at the retail level increased 1.2% in January, slightly higher than the 0.8% growth first predicted. The unexpected growth in retail sales came mostly from the uptick in department stores sales.
Later on, the Reserve Bank of Australia will announce its decision on the country’s benchmark interest rates. The bank is predicted to hike rates by 25 basis points to 4.00%. Head on over to Forex Gump’s blog for his take on the matter.
The Aussie inched its way upstream yesterday, on the strength of both increased risk appetite and some good economic data. The AUDUSD closed slightly higher at 0.9034.
As expected, the RBA hiked their base interest rate another 25 basis points, bringing it up to 4.00%. This came as no surprise, as it was right in line with market expectations. According to some, this could be the start of a series of continuous rate hikes over the next couple of months.
And why not? The Australian economy has been flexing its muscles as of late and has been performing quite well. How good has it been? Well, this morning, GDP figures were released and indicated that the economy grew by 0.9% last quarter, which was right in line with consensus. The fact that Australia avoided a recession and has been posting faster than anticipated growth are enough evidence for the RBA to want to hike interest rates.
No other data will be released today, but be on the lookout for data from other countries. Also, keep a close eye out on commodity trading. If gold prices soar higher, it may just take the Aussie along for the ride.
G’day mate! Australia’s economy is looking sharp, isn’t it? Upbeat reports from both Australia and the US stoked the AUDUSD up to a high of 0.9086 in yesterday’s trading.
The Australian economy boasted of a 0.9% GDP growth for the fourth quarter of 2009, a few notches higher than the previous quarter’s 0.3% expansion. This marks their economy’s fastest growth rate in two years! Spurred by business investment, household consumption, and government spending, this pushed their overall growth rate for 2009 to an impressive 2.7%.
Later on, strong US economic reports, namely the ADP non-farm employment report and the ISM non-manufacturing PMI caused a run of risk appetite.
Today, Australia just released their trade balance for January. The report showed that the deficit narrowed from 2.17 billion AUD to 1.18 billion AUD during the month, driven by a rise in iron ore exports and a decline in fuel imports. This improving trade balance supports speculations that the growing demand from China, Australia’s major trade partner, will make a significant contribution to the Land Down Under’s economic growth.
No other economic reports are due from Australia until the end of the week so expect those optimistic figures to keep the Aussie afloat… unless other economic reports and events spark a shift in risk sentiment! Watch out for the release of the US pending home sales today and their employment report tomorrow. We all know how these reports can usually set volatility ablaze!
The Aussie snapped its 4-day winning streak against the greenback yesterday. The AUDUSD slid from 0.9055 to close at 0.9012. This drop in the Aussie’s valuation could have due to some profit taking actions.
Australia’s economic calendar will be report-free today. Watch out, though, for the release of the US NFP report later at 1:30 pm GMT as this will certainly cause the major pairs to swing wildly. US firms are seen to have cut about 56,000 jobs in February. A better figure, however, could spark some risk taking, benefiting the higher yielding currencies like the AUD.
Risk appetite swung in full last Friday when better-than-expected employment figures in the US came out. We all know what this means… Yep, a major rally in the commodity-based currencies. The Aussie ended Friday at 0.9080, almost 150 pips higher from its opening price that week.
The surge in risk appetite mainly came from the better-than-expected non-farm payrolls report from the US. It showed that only 36,000 net jobs were lost in February and not of 56,000 like initially expected. Likewise, joblessness in the country covering the same period remained at 9.7% instead of rising to 9.8%.
Looking ahead, we’ve got a couple high-profile reports due this week.
On Wednesday, at 12:30 am GMT, expect to see Australia’s home loans report. It is predicted to show an uptick of 2.1% in home loans for January, opposite the 5.5% drop seen in December. If the net forecast holds, it would mark the first increase in four months, which could push the Aussie even higher.
More importantly, however, is Australia’s labor market reports on Thursday at 12:30 am GMT. The consensus is that a net number of 15,300 jobs were created in February, which is a significant decrease from the 52,700 addition in January. Joblessness is predicted to remain at 5.3%. Still, the actual results of the report has exceeded expectations for the past five months, and given interest rate hike we saw last week, we could see the upcoming report print better-than-expected results.
The Aussie looked headed for big gains early yesterday, hitting a 7 week high. However, it couldn’t sustain its gains and ended up only marginally ahead, as the AUDUSD closed at 0.9094.
Early this morning, the ANZ job advertisements m/m report was released. It showed that job advertisements rose by 19.1% last month, which reflects the uptick in the Australian labor market that we saw recently. With more employment data coming out later this week, could this be a sign of more good news to come?
Also released this morning was the NAB business confidence index. The index printed a reading of 19, up from 15 last month. This indicates that business managers are becoming more optimistic on the economy. No surprises here – after all, all signs are pointing up for the Australian economy.
Later tonight, the Westpac consumer sentiment index is due at 11:30 pm GMT. Last February, consumer sentiment fell by 2.6%. Given the recent sentiment towards the Australian economy, could we see an upside surprise in this month’s reading?
A fresh wave of optimism pushed the Aussie to cruise higher against the greenback and the yen after economic reports highlighted the improving conditions in Australia.
The Australian economy is set to expand at a faster pace, according to RBA Assistant Governor Philip Lowe. He also said that this expansion would most likely result to higher price levels, particularly in the housing market. However, the recent rate hikes are expected to ensure that inflation stays within the central banks target range.
Meanwhile, the Westpac consumer confidence report showed that sentiment improved by 0.2% this month, posting a nice rebound over the 2.6% decline in confidence seen in February. This suggests that, despite higher borrowing costs, consumers are still confident with their financial condition.
However, the home loans report seemed to indicate otherwise. January home loans slid by 7.9% instead of rising by 2.1% as expected. Higher interest rates, which translates to higher mortgage costs, are clearly putting a dent on the housing market, which suffered its worst slump in home loans since June 2000.
No other economic reports are due from Australia today but keep an eye out for the trade balance report from China, Australia’s major trade partner. Their trade surplus is expected to narrow from 14.2 billion CNY to 7.6 billion CNY in February, hinting that imports outpaced exports during the month.
The Aussie extended its winning streak against the USD yesterday though its lead over it was a lot tighter than that the previous ones. The AUDUSD logged in a modest gain and rose it 0.9149 from 0.9140.
China’s trade balance shrunk to its lowest level in one year at $7.6 billion due to a 44.7% jump in its imports. An increase in its demand for raw materials will benefit Australia greater since it is one of its major suppliers.
On a separate report, Australia’s February employment change came out at a measly 400 which is way lower than the 15,000 projections. Its January figure, however, was revised up to 56,500 from 51,700. Still, the country’s jobless rate came just as expected at 5.3%. Nonetheless, the less-than-stellar employment hiring caused the Aussie to lose some support.
No other reports are due in Australia today. The Aussie, though, could be affected by the major economic releases in Switzerland, Canada, and the US. Watch out for these issues!