Daily Economic Commentary: Australia

“Aussie let us take you down. CPI’s the way to lose pips,” sang the bears as they pounced on the currency after the release of Australia’s inflation figures. AUDUSD fell almost a hundred pips from its opening price of .9021 before it ended the day at .8936.

  Printing at 0.6% and falling short of the 1% consensus, the disappointing CPI figures dashed all hopes for an interest hike from the [RBA](http://www.babypips.com/forexpedia/RBA). Boo hoo! This suggests that price levels are stable despite Australia‘s relatively strong economic growth. Investors are probably thinking that there is no need for the central bank to raise its rates anytime soon. Heck! It was only last week that the RBA said that it will base its next rate decision on the CPI figures.

  We don’t have anything on our economic calendar for the Aussie today. But be on your toes and gauge the market’s risk sentiment as this will probably dictate price action. Good luck!

Let’s put another shrimp on the barbie! Aussie bulls were partying their hearts out last Friday in celebration of another AUD victory over the Greenback. AUDUSD skipped and hopped its way up to .9067 to record a 20-pip gain for the day.

No reports from Australia last week, but let’s see if this week’s heavy releases can extend the Aussie bulls’ party.

On Tuesday at 1:30 am GMT, we get a peek at the ANZ job ads report, which measures the change in the number of jobs advertised in major newspapers and websites. Given Australia’s relatively healthy labor market, it’s interesting to see if the month of July can still mark an improvement from the awesome 2.7% uptick seen in June.

At the same time, the June retail sales report is due and is anticipated to show a 0.4% increase in consumer spending, double the rate of growth of the previous month.

Then at 4:30 am GMT, the spotlight focuses on the RBA once again as they make another interest rate decision. Aussie bulls, don’t hold your breath for a rate hike! It looks like the RBA won’t deliver this time, especially since inflation seems to be in check as of the moment.

On Wednesday, Australia publishes its trade balance figures at 1:30 am GMT. June is projected to show a surplus of 1.8 billion AUD, which is 150 million AUD wider than the surplus of May. With strong demand from China providing plenty of support for Australia’s export industry, don’t be surprised if results come in better than expected.

Ending your week in the Land Down Under is the RBA monetary policy statement. Some analysts say the RBA will announce that they see a brighter future ahead of Australia. Given the relatively strong recovery Australia has been showing recently, these analysts might just be right! Catch the statement at 1:30 am on Friday.

Phew! There you have it, folks! A preview of the week to come! May the pips be with you all!

Huh?! What bad reports? It seemed that traders paid little attention to China’s weak manufacturing data when they bought the Aussie to its three-month high against the dollar. AUDUSD ended the day at .9124 after opening 68 pips lower at .9056.

Australia’s new home sales report might have helped the Aussie after the data showed a decrease by 5.1%, a little better than May’s 6.4% decline. Still, traders ignored the poor reading, and instead focused on positive manufacturing data in the UK and euro zone.

Melbourne Institute’s inflation gauge was another story, however, when it printed at 0.1% after June’s 0.3% figure. The lack of inflationary pressures further strengthened the rumors that RBA wouldn’t hike interest rates after all.

Speaking of interest rates, the RBA is set to announce their decision at 4:30 am GMT. The cash rate is widely expected to remain at 4.50% this month, but many think that it’s still a coin toss on whether RBA will extend its interest rate hike pause. Don’t miss this big red flag!

Them Aussie traders sure know how to get jiggy! AUDUSD boogied down to an intraday low of .9071 before it shimmied up to an intraday high of .9150. At the end of the day, it rested at .9128, practically unchanged from its opening price.

Yesterday’s economic events in Australia were a lot like the TV series “The Bachelor”- one bad episode after another! Not that I watch that show…

The day started off with a poor building approvals figure. The month of June fell well below expectations of a 2% increase when it recorded a 3.3% drop in the number of new building approvals issued following a 6.4% decrease in May.

Retail sales didn’t grow as strongly as analysts expected either. Results for the month of June show a 0.2% increase, which is the same pace as the previous month but short of the forecasted 0.4% uptick.

To top it all off, the Reserve Bank of Australia decided to keep rates at 4.50%!

Hmm… It looks like the RBA’s neutral stance is what kept the Aussie from budging in spite of the bad economic data. They believe the current monetary policy settings are appropriate as they deemed both the country’s economic growth and inflation to be on target.

Earlier today, Australia published a couple of reports with green figures. The June trade balance came in better than expected with a surplus of 3.54 billion AUD, which is wider than the previous month’s surplus of 1.83 billion AUD and forecasts for 1.81 billion AUD.

The quarterly housing price index figures also printed awesome results for Q2 2010. Following a strong increase of 4.8% the previous quarter, analysts expected to see a more modest uptick of 2.0% but were surprised to witness a 3.1% increase.
It looks like the Aussie is gaining ground with help from these two reports, but will they determine AUDUSD’s direction for the rest of day? Watch the charts to find out!

“I’m on top of the wooorld!” screamed the Aussie as it climbed for the fifth straight day. Better-than-expected economic figures sent AUDUSD up 44 pips from its opening price to finish at .9171.

The Aussie found plenty of energy to begin its ascent with help from some cool trade balance data. Results for the month of June not only exceeded expectations of a 1.81 billion AUD surplus, it downright blasted way past it! A whopping 3.54 billion AUD surplus was recorded in June, following up the 1.83 billion AUD surplus posted in May. This is the largest trade surplus on record in Australia! You’re witnessing history here, baby!

Thanks mostly to strong exports, the latest numbers mark the third consecutive month that Australia has posted a widening surplus. Exports leaped a staggering 7.1% last month, so it looks like its export industry is doing quite amidst fears of weakening global demand.

Likewise, the house price index came in 1.1% better than expected when it revealed that house prices rose 3.1% in Q2 2010. Though the previous quarter’s reading was revised down from 4.8% to 4.2% (boo!), the trend of rising prices indicates a healthy housing market (hooray!).

Australia will be giving us a break from high-impact releases today. For your daily report fix, head on over to the US which is set to publish its weekly unemployment claims data at 12:30 pm GMT. A bout of risk-taking could ensue if the report prints an upside surprise.

With only the AIG construction index under its belt yesterday, the Aussie might have been affected by the mixed reports on the euro zone, UK, and the US. The positive comments of ECB’s Trichet were outweighed by the negative vibes from the BOE decision, as well as the weaker-than-expected initial jobless claims report in the US. AUDUSD dropped to an intraday low of .9116 before it closed at .9152.

If negative reports from other countries harmed the Aussie, what more could the RBA statements do? A few hours ago the RBA released their monetary policy statement, which revealed that weaker spending from households and the government are putting a damper on the inflationary pressures created by the mining boom.

In fact, the RBA even predicted that Australia’s economic growth won’t put much inflationary pressures over the next few years, and estimated that core inflation will average 2.75% until the end of the year.

It’s still touch and go on how markets will react to this statement, as Aussie pairs barely moved after the report’s release. Keep an eye out on the other countries, though, as red flags are waving all over our economic calendars today. We’ll have the UK’s manufacturing data, Canada’s unemployment rate, and the big US NFP report to keep the volatility charged, so watch your trades closely!

Gimme an A! Gimme a U! Gimme a D! What do you have?! A winner! Friday’s price action on AUDUSD saw the Aussie trounce the Greenback. Aussie bulls cheered on the currency as the pair rose 36 pips to rest at .9188 for the weekend.

The fact that the RBA’s quarterly monetary policy statement hinted at a longer pause on rate hikes wasn’t enough to rain on the Aussie bulls’ parade. It was revealed that the central bank’s forecasts were mostly unchanged from the previous quarter, which suggests that there might not be much need for them to make policy changes yet. Looks like the RBA will be chillin’ like a villain… For now!

The action doesn’t stop in Australia, does it?! Just minutes ago, ANZ published its monthly job advertisements report. The months of June and May both managed to record 2.7% increases in the number of jobs advertised in newspapers and websites. But judging by the 1.3% uptick in July, it seems like employment growth is starting to slow down.

Fresh off the press is the home loans report, which revealed that the housing market isn’t faring well either. June posted a disappointing 3.9% drop in the number of new loans issued for homes. Not only is this figure a big drop from the 1.9% increase in May, but it also falls short of the expected 2.1% decline.

Already, the Aussie has given up some of its gains from last Friday. Starting off with such bad news, it doesn’t look like we’ll be hearing the Aussie bulls cheer today. Boo!

C’mon Aussie old boy! You gotta step up yo’ game! After a brief and minor rally during the Asian trading session, it allowed the USD to walk all over it, causing AUDUSD to close at .9167, 19 pips lower for the day.

But you can’t really blame the Aussie for its poor performance. It didn’t exactly have the best start to the day.

Early in the morning, it woke up to terrible economic figures. The ANZ job advertisements report showed slowing growth in the number of job ads in newspapers and websites, from 2.8% in June to 1.3% in July. Investors probably took this as a sign that employment could get more difficult in the coming months.

After that, the June home loans report showed a drastic 3.9% decline in the number of new loans granted for homes, much worse than the 2.1% drop that was expected. After seeing a 3.0% increase in the previous month, it’s no wonder investors were so turned off!

Look what we have here! National Australia Bank just rolled out their latest business confidence report and it says that confidence declined from the previous month’s reading of 4 to just 2 in July. But being able to maintain a score above 0 means that conditions are still improving, so it might not be such bad news after all! Let’s see how the markets will react.

Talk about going down under! The Aussie sank to a low of .9059 against the dollar and 77.85 against the yen as weak economic figures dragged it down.

Business confidence slipped to its 14-month low in May, according to the index released by National Australia Bank. The reading fell from 4 to 2 during the month as the impact of RBA’s aggressive tightening measures is taking its toll on domestic demand. This marked the fifth consecutive monthly decline in business confidence.

Today, the index of consumer confidence also revealed disappointing results. The Westpac consumer sentiment index fell from 11.1% to 5.4% this month, implying that consumers are less confident with their financial and economic outlook. This downbeat report pushed AUDUSD back down again.

No other reports are due from Australia today but do keep an eye out for the release of several economic figures from China at 2:00 am GMT. Since China is Australia’s number one trade partner, its economic standing also has a say on the Aussie’s movement. Watch out for the release of China’s CPI, fixed asset investment, industrial production, PPI, and retail sales figures. Also bear in mind that, since China previously implemented some tightening measures on their economy, there’s a chance that their recent data could show weaknesses.

My my, it looks like my buddy Forex Gump was right in predicting that the Aussie could sink down under! Weak economic figures from China, Australia’s number one trade buddy, forced AUDUSD to nosedive from a high of .9165 all the way down to a low of .8981 yesterday.

Yikes! It looks like the effects of China’s recent tightening measures are starting to take their toll on their economy. Consumer spending weakened as retail sales posted only 17.9% annual growth in July, much slower than the expected 18.5% increase. Their PPI also came in below expectations, printing a measly 4.8% rise, considerably less than the projected 5.9% uptick and the previous month’s 6.4% growth. New loans and fixed asset investment also printed disappointing results. Only the CPI and industrial production figures came in line with expectations.

Even though its major trade partner is showing signs of weakness, Australia managed to chalk up a tiny improvement in consumer confidence this month. The Westpac consumer sentiment index printed a 5.4% increase in August on top of the 11.1% rise seen in July. This pushed the indicator to its seven-month high despite the effects of RBA’s recent tightening moves.

Stay tuned for the release of Australia’s employment data at 1:30 am GMT today. The report could show that the increase in hiring for July was slightly weaker compared to the 45,900 rise in employment last June. Still, if the actual figure comes in better than the projected 20,100 uptick in hiring, the Aussie could find some support. Otherwise, it could continue to slide down. Stay on your toes!

The Aussie was able to parry most of the Greenbacks attacks yesterday, but in the end it still tasted defeat. Ouch! Aussie sellers licked their chops as AUDUSD dropped 24 pips from its opening price to land at .8963.

The Aussie was handicapped early in the day when Australia’s employment data came out. Studies showed that there was an increase of 23,500 jobs in July, much better than the 20,000 uptick that was expected. But on the downside, June’s employment change data was revised down from an increase of 45,900 to just 37,400.

All in all, the results for July caused the unemployment rate to rise from 5.1% to 5.3%.Some say the increase in the unemployment rate could just be the result of more people jumping back into the workforce.

No reports from Australia today. In the meantime, make sure you have a good grasp of risk sentiment as it seems to be driving the markets lately.

Without any economic report from Australia last Friday, the Aussie was left vulnerable to the market’s negative risk sentiment. The Aussie bulls hustled AUDUSD to an intraday high of .9036 only to get trampled by the bears during the London session. Tsk, tsk. The pair ended the week at .8931 giving the Aussie a 28 pip loss.

I don’t think today will be any different for the Aussie either. The only economic report we had for it is on motor vehicle sales which was announced earlier. According to the Australian Bureau of Statistics, purchases of new automobiles declined further in July to -2.6% from June’s -1.2% reading. Uh oh… However, not all hope is lost. Who knows, risk appetite may kick in today!

Tomorrow is big day for the Aussie with the minutes of the latest RBA meeting on tap at 1:30 am GMT. So you may want to tune in to that if you’re planning to catch some pips with the Aussie!

“I wanna be a pipllionaire so freakin’ bad,” sung the Aussie as it finally broke free of the bears’ attacks. But it wasn’t an easy win as AUDUSD dipped to an intraday low of 0.8859 after it opened the week at 0.8940. The pair then reached an intraday high of 0.8995 and closed the day at 0.8973, ending the Aussie’s losing streak.

It may have gotten lucky with the bulls yesterday as the economic reports from the US somehow tamed risk aversion and traders dumped the dollar because of its bad fundamentals. But that’s just me.

The only report we heard from Australia was on new motor vehicle sales. It showed that purchases of brand new cars declined by 2.6% in July, following the 1.4% drop in June. I don’t think traders thought much of it though. I have a feeling they’re looking forward to the minutes of the most recent RBA meeting which was released earlier today.

If you didn’t catch some pips from the release, don’t feel too bummed out about it. The general elections in Australia are scheduled this Saturday and we most probably see a lot of wild moves from the Aussie. I think the bears may have upperhand though as political uncertainty usually doesn’t sit well with the bulls.

Tomorrow we have the Westpac-MI leading index, DWER Skilled Vacancies and Wage Price Index to help us with our Aussie trades. Good luck and may the pips be with you.

Score one for the Aussie! Thanks to a healthy risk appetite, it was one of the biggest winners against the Greenback yesterday. The risk rally sent the comdoll brothers up the charts, with AUDUSD rising 79 pips for the day.

According to the latest monetary policy meeting minutes, the RBA is maintaining its outlook for the Australian economy. They left their growth forecasts unchanged at a range of 3.75% to 4% for 2011 and 2012, while inflation is expected to stay within 2.75% and 3% for 2011.

When asked about the possibility of rate hikes, RBA Governor Glenn Stevens answered that the central bank would consider all economic factors and do its job. If you think this sounds vague, you’re not alone! But ultimately, most aren’t expecting to see another rate hike until next year.

Just minutes ago, the Westpac-MI leading index was issued. Although it was unchanged for the month of June, the report revised the previous month’s reading up from 0.2% to 0.3%. As a means of predicting future economic direction, it seems to be indicating stable growth. Let’s see if the bulls can feed off this and start a mini rally.

On the other hand, the quarterly wage price index printed 0.1% worse than expected by posting a 0.8% increase in the price the government and businesses pay for labor. This report is often used as an indicator of future inflation since the additional labor costs businesses incur are often passed on to consumers. Will traders take note of this and sell the Aussie? Stay tuned to find out!

The Aussie got a huge bear hug from currency traders yesterday. It erased the gains it made on Tuesday when it closed 162 pips lower at 0.8893. Bear hug… Haha! I crack myself up! But enough of my oh-so-funny quips. Let me give you the lowdown on the Aussie’s bad day.

It was off to a bad start with a few to not-so-stellar economic reports from Australia. According to the Australian Bureau of statistics, the wage price index for the second quarter fell short of the 0.9% forecast when it printed at 0.8%. The disappointment was supported by the 0.3% decline in skilled vacancies. Why? Well a high number for job vacancies usually add pressure employers to raise the wages.

There was also Melbourne Institute’s leading index which might have suggested that the economic growth in the country is slowing. June’s reading was at 0.0% following May’s 0.3% figure.

All in all, these three reports might have just given the RBA more reason to leave the country’s rates on hold.

But the Aussie’s bad luck didn’t end there. The Australian company BHP Billiton’s billion-dollar bid for Potash Corporation which is based in Canada put the currency under selling pressure. This meant that a huge amount of Aussies will be sold in exchange for ‘em Loonies. Uh oh.

And it looks like lady luck won’t be on its side today either. Sorry Aussie bulls, but with the average weekly wages for the second quarter printing at 0.8%, disappointing the 1.2% consensus, how can you hustle? However, it’s only the start of the day’s trading. A report may come up and flick the risk appetite switch back on.

We don’t have anything on tap for the Aussie tomorrow except for Deputy Governor Battelino’s speech. You may want to tune in to that as he could drop some hints on the central bank’s next interest rate decision. Also, keep tabs on the BHP-Potash takeover bid as this may continue to affect the Aussie’s fate on the charts. Be careful with your trades and please do take note that Australia’s general elections is coming up this Saturday. Good luck!

“That’s what you get when risk aversion kicks in! Whoo-ooh-oh,” sang the bears as they pounced on the Aussie in yesterday’s trading. AUDUSD fell like a rock after it reached its intraday high at 0.9018 and closed the day 64 pips lower at 0.8927.

Aside from risk aversion, sparked by disappointing US reports from the, there was also the disappointing report on Australia’s labor market. The Australian Bureau of Statistics reported that average weekly wages increased at a measly rate 0.8% during the second quarter, falling short of the 1.2% consensus. Boo!

We don’t have anything left for the Aussie until next week but note that elections will be conducted in Australia tomorrow. And remember, political uncertainty usually doesn’t sit well with investors so be very careful with your Aussie trades!

V for the Aussie! Yes, yes, it’s a corny joke but that’s exactly how AUDUSD traded last Friday! While the pair did lose out early on during the Asian trading session, it managed to bounce back once the US trading session kicked in. AUDUSD eventually settled at .8923 by the end of the day, just 6 pips lower from its opening price.

According to the economic calendar, the only thing to worry about in terms of data this week is the release of Australia’s construction work done. Scheduled to come out on Wednesday at 1:30 am GMT, it is predicted to show a rise of 3% for second quarter from 1.9% during the first quarter of this year. If the actual results come in higher, we could see the Aussie find buying support.

Even though AUDUSD gapped down over the weekend, the pair was quick to erase those losses and chalk up some gains as it rallied to a high of .8983. It looks like the Aussie is acting indifferent to all the political uncertainty going on in the Land Down Under!

My buddy Forex Gump pointed out that Australia is facing the possibility of a hung parliament since early exit polls revealed a tight race between the Liberal and Labor parties. That just means the fate of the proposed mining tax hangs in the balance! While the Liberals promised that they would eliminate the mining tax completely, a victory by the Labor party could seal in that 30% tax on the mining industry. But if the seats in Australia’s House of Representatives end up getting split between the two parties, we might just be in for a longer round of squabbling over this mining tax issue. I don’t think the Australian dollar would be too pleased with that.

Australia won’t be releasing any economic reports today as investors are all eyes and ears on the updates regarding the recent elections. If you’re trading Aussie pairs, I suggest you stay tuned too!

“Aussie get low, low, low, low, low…” If the FX market had a resident RnB singer named Pip Rida, he’d probably sing that after the currency added 99 pips to its stack of losses against the dollar yesterday. AUDUSD tumbled to its 5-week low at 0.8798 before it closed the day at 0.8816. Tsk, tsk!

Other than the political uncertainty in Australia, the comeback of risk aversion in the markets might have kept the currency pinned down on the charts. But don’t fret! Reports suggest that the risk aversion may not be as nasty as it was before to the higher-yielding currencies.

Some analysts say that the Aussie bulls rallied when the disappointing figures from the US housing market were released. That could have been a go signal for the bears to take control of AUSUSD! This probably means that when Australia’s election results are out and risk appetite kicks in, the Aussie will finally be able to rally. Hah! Whenever that may be.

Earlier today, the Australian Bureau of Statistics reported that construction work done during the second quarter increased by 3.5%. Whooo-wait! Although the figure beat the 3.0% consensus, the good vibes brought about by this report could disappear faster than you can say “Shawty!” But that’s just me as I think risk aversion will still dominate the markets.

Good luck with your trades and be careful!

Weeee! The Aussie rode the wild roller pip-coaster yesterday after risk appetite pushed the markets in several directions throughout the day. AUDUSD rose to an intraday high of .8895, and then dropped to an intraday low of .8771 before it closed at .8826.

The better-than-expected construction data yesterday might have helped boost the Aussie early in the day, when the data printed a better-than-expected 3.5% increase after rising by 4.2% last quarter.

Also comin’ in hot off the press is the CB leading index report that showed a 0.1% increase in June after rising by 0.3% in May. Will this be enough to attract the Aussie bulls?

Maybe traders are waiting for the quarterly private capital expenditure report out at 1:30 am GMT. The purchases of private businesses in the second quarter is expected to rise by 2.3% after dropping by 0.2% in the first quarter, but a higher number might signal that demand for Australia’s products remain healthy despite the threat of cooling demand from all over the world.