Daily Economic Commentary: Australia

Trading Discussion News and Economy
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Whew, that was close! Lingering risk appetite in markets boosted the Aussie against the dollar yesterday despite the release of less-than-stellar economic data from Australia. AUDUSD rose by 49 pips to a .8874 close after climbing to an intraday high of .8919.

Private capital expenditure for the second quarter failed to wow the markets after it dropped by 4.0% after dropping by 1.0% in the first quarter. The monthly CB leading index also disappointed the Aussie bulls when it fell to 0.1% after May’s 0.4% figure. Uh-oh. Does this mean that the Australian economy’s growth isn’t as dandy as their trade figures suggested?

No data will be released from Australia today, but keep your eyes peeled for the big party over at the Jackson Hole symposium over the weekend. Aside from seeing famous finance ministers, we might also get clues on their decisions that might affect risk appetite and global economic growth.

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Surf’s up, dudes! Thanks to the US dollar selloff, the Aussie cruised higher last Friday and even gapped higher over the weekend. Will it be able to keep its head above the .9000 handle?

Even though Australia didn’t release any economic reports last Friday, the Aussie went for huge gains that day as AUDUSD leaped from a low of .8845 to a high of .8999. Hah, it ain’t about to sink down under just yet!

A bunch of top-tier Australian data are set to rock the Aussie’s boat this week. GDP, retail sales, trade balance, building approvals, new home sales… Need I say more? Let’s take a quick look at each of these reports to figure out where the Aussie could be headed this week. Pretty exciting, huh?

Building approvals and retail sales are both set for release tomorrow 1:30 am GMT. Australian housing data have been sliding downhill for the past few months as they suffered the brunt of the RBA’s consecutive rate hikes. After that 3.3% slide in June, building approvals are expected to post another downtick for July but a smaller one this time. However, if the actual report comes in worse than the expected 0.6% decline, the Aussie might fall below the .9000 handle again. On the other hand, consumer spending is expected to show signs of strength as retail sales are expected to post a 0.4% increase in July, higher than the 0.2% uptick in the previous month.

On Wednesday (drum roll, please), Australia’s second quarter GDP is due! Despite the disappointing figures Australia has been churning out for the past few months, economic growth for the second quarter is still expected to outpace the 0.5% expansion in the first quarter. In fact, a 0.9% GDP increase is projected. Find out if the actual figure is a hit or miss at 1:30 am GMT Wednesday. Mark your calendars, people!

Then, on Thursday, the trade balance report due 1:30 am GMT could reveal that the surplus narrowed from 3.54 billion AUD to 3.11 billion AUD in July. Hmm, I seem to recall a little downturn in China’s data recently… Well, that could mean that Australia’s largest trade partner toned down their purchases of the Land Down Under’s goods lately, possibly putting a dent on Australian exports. Could this lead to a downside surprise in Australia’s trade balance? Find out soon!

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Weee!!! AUDUSD slid down the pip-charts yesterday despite Australia’s mixed reports. The pair dropped by 106 pips from its open price at .8921 as risk aversion trumped all economic reports from the commodity-related economies.

It seemed that the rise of the company profits to 18.9% in the second quarter was no march for the 7.0% drop in home prices. Hmm, did the high interest rates and weak global economic growth finally take their toll on the country’s housing demand?

Probably not just yet. The monthly building approvals report released a few sips of coffee ago revealed a 2.3% rise from last June’s 3.4% decline.

Monthly retail sales also wowed the markets by printing a 0.7% growth after its 0.4% rise last June.

Meanwhile, data on the country’s current account revealed that the difference between imports and exports narrowed down to a 5.6 Billion AUD deficit in the second quarter despite the threat of a weakening global demand.

It’s just too bad that the private sector credit for August didn’t join in on the fun when it missed the 0.3% expectations by clocking in at 0.1%. Does this mean that the Aussies are less willing to get loans and spend in August than last month?

The AIG manufacturing index at 11:30 pm GMT might not tell us more about consumer sentiment, but it can give us clues on the manufacturers’ outlook on their economy. Will it meet last July’s 54.4 optimistic figure? Remember that a number below 50.0 means that manufacturers aren’t feeling the love for their economy in the short-term. Stay on your tippy-toes on this one!

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Ugh, not again! The Aussie took another hit from the Greenback yesterday despite printing better-than-expected building approvals and retail sales reports. AUDUSD slid down by 25 pips from its open price at .8896 after peaking to an intraday high of .8957.

Risk aversion might have done its job on the comdoll, but the disappointing figures for the private sector credit data and the AIG manufacturing index could have also done its number on the Aussie. Recall that private credit fell to a 0.1% growth from July’s 0.2% figure. Meanwhile, the AIG index dropped closer to the pessimistic figure at 51.7 from last month’s 54.4 number.

But what’s this?! As of writing, AUDUSD is climbing its way up the charts all the way to .8982! The better-than-expected GDP report released a few Twitter posts ago must have done its magic! Australia’s GDP rose by 1.2% in the second quarter, which was better than the first quarter’s 0.7% growth and the 0.9% growth expectations.

But the action isn’t over yet! Watch out for the annualized commodity prices out at 6:30 am GMT. If the data comes out higher than July’s 51.0% rise, then we just might see the Aussie soar like a pip-rocket!

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Thanks to better-than-expected GDP figures, the Aussie was able to stage a beautiful rally across the charts yesterday. AUDUSD managed to climb all the way to the .9100 handle while AUDJPY tested 77.00.

According to Australia’s GDP report, the country expanded 1.2% during the second quarter of this year, an improvement from the first quarter and high than the 0.9% growth initially expected. Traders saw this uptick in GDP as a sign that Australia’s economy will further strengthen in the months to come.

But earlier today, the Aussie retraced some of its gains on account of the country’s trade balance. The report revealed that Australia’s surplus dropped to 1.89 billion AUD in July from 3.44 billion AUD in June. It was also significantly below the 3.11 billion AUD surplus consensus.

Nothing left on Australia’s calendar today, but that does not mean we will not see any action! US will be spewing a lot of economic data today so we could see quite a bit of movement once the US trading session begins. Stay sharp folks!

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The last 24 hours proved to be a little less exciting compared to the moves we saw earlier this week for AUDUSD. The pair had opened up the day at .9094, fell to an intraday low of .9055, and eventually closed the NY trading session barely changed at .9118.

As I said yesterday, the initial drop AUDUSD experienced was due to Australia’s weaker-than-expected trade balance. It showed that the country’s trade surplus fell to 1.89 billion in July from 3.44 billion AUD the month before. Thankfully, leftover optimism from Australia’s strong GDP report was enough to help AUDUSD regain its losses and even close the day on the positive territory.

Nothing important on Australia’s economic calendar today, but we will be seeing the US NFP report at 12:30 pm GMT. There is no doubt that we will see some price action fireworks once that report comes out, so better be prepared. (By prepared I mean take a look at Forex Gump’s blog post about it!).

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Summer may be over, but the heat is still on for the Aussie! Despite the lack of economic reports from the Land Down Under, AUDUSD managed to climb by 50 pips from its open price to its .9168 closing price.

Will this week’s economic reports keep the Aussie bulls’ energy pumping? The ANZ job advertisements started the week on the right foot with a 2.6% growth after its 1.4% rise last July.

Meanwhile, traders are going to look closely at the Reserve Bank of Australia’s interest rate decision tomorrow at 4:30 am GMT. Last month, the RBA gave vibes that they could stop hiking their interest rates, but a few economic reports suggested that the Australian economy can recover even with a high interest rate.

Lastly, the unemployment reports on Thursday at 1:30 am GMT can also excite the Aussie bulls, especially if the unemployment rate meets the expectations of 5.2%, down from July’s 5.3%.

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It was a g’day for all the mates down in Australia yesterday. The Aussie was one of the few currencies that were able to make ground against the Greenback as AUDUSD jumped from its opening price of .9143 to close at .9171. I know it doesn’t sound like much, but given the lack of activity throughout the charts yesterday, it’s impressive enough!

The Aussie started the day off quite well as it rose to quickly fill the weekend gaps created against the Greenback and the yen. It later found more energy to sustain its climb when the ANZ job ads figures revealed that the number of job ads in newspapers and websites increased by 2.6% in August. Does this mean companies are more willing to hire now? If you compare the latest results to the more modest 1.4% uptick in July, it certainly looks like it!

Aussie traders, strap on your seatbelts because you could be in for a wild ride today. The RBA is set to make its interest rate decision at 4:30 am GMT.

Yes, it’s true that most aren’t expecting any changes to be made to the 4.50% interest rates. But the announcement is still worth catching because recent economic data have been hinting at a strong recovery. The RBA may just give back some love and dish out an optimistic review of the economy. I bet Aussie bulls are foaming at the mouth just thinking about it!

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The Aussie finally stopped singing DJ Khaled’s “All I Do Is Win” when it broke its four-day winning streak against the Greenback yesterday. Hey, you can’t win ‘em all! AUDUSD fell from .9170 to close at .9112, while AUDJPY dropped from 77.23 to 76.31.

Even though it was widely expected that the RBA would keep interest rates at 4.50%, markets expressed displeasure as an Aussie sell-off ensued. Adding further insult to injury was the fact that Prime Minister Julia Gillard won support of key independent lawmakers. As a result, Gillard’s Labor party retains control of the government and is able to pursue their plans of taxing mining companies. And let’s not forget the bout of risk aversion that weakened the other comdolls, too!

On a more positive note, the RBA spit out a few optimistic words when it announced its decision. According to RBA Governor Glenn Stevens, the labor market is improving, and both public and private spending have been picking up. All in all, he described the economy’s growth at “trend pace.” Not bad, eh?

Just minutes ago, Australia published its latest home loans figures. The month of July was predicted to show a 1.1% uptick after June posted a horrendous 3.9% decline. Instead, actual results came in better than expected and printed a 1.7% increase! Now let’s see if Aussie bulls will react to this bit of positive data and start a rally.

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The Aussie received a pat on the back from the markets yesterday on a risk rally and good economic data combo. It locked in a 57-pip gain against the dollar at .9170 after opening at .9113. Ace!

The positive home loans report might have given the Aussie’s bull rally a push when it printed a 1.7% growth after dropping by 3.2% last June.

If the markets liked the better-than-expected home loans report, then they’re gonna go gaga over the hot-off-the-press employment data! The report released a few coffee cups ago revealed that there were 30,900 workers added to the work force in August. This clobbered the expectations of a modest 27,200 rise, and pushed the unemployment rate lower.

Speaking of unemployment rate, the data clocked in at 5.1%, which was better than the expected drop to from 5.3% to 5.2%. Whooo!!! Will the Aussie repeat yesterday’s flight up the charts? Watch your trades closely, mates!

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Make way for the king of the hill! The Aussie clobbered its major counterparts yesterday after Australia showed off its big muscles in its employment figures. AUDUSD soared to its .9238 closing price, while AUDJPY climbed by 48 pips to its closing price of 77.43.

Yesterday the employment figures revealed that 30,900 workers were added to Australia’s work force in August. This might be the reason why the unemployment exceeded the expectations and dropped to an 18-month low.

Hah! I guess there’s no stopping the mean employment machine! The stellar employment figures suggested that Australia’s economy can still be awesome even with the threats of high interest rates, cooling global demand, and a slowdown of growth in China, Australia’s biggest trading partner.

Australia will take a breather from releasing economic reports today, but watch out for any retracements in your charts! Those Aussie bears might sneak up on ya! Happy trading!

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The surf wasn’t the only thing that was up last Friday in Australia! The Aussie climbed once more against the Greenback, extending its wins to complete its trifecta. AUDUSD closed at .9318 after opening at .9297, while AUDJPY leapt from its opening price of 76.94 to close at 78.02.

The Aussie was back in the game after risk sentiment improved. Commodities markets gained, helping the Aussie and its comdoll brethren climb up the charts.

Earlier today, it picked up where it left off last Friday. There’s just no stopping the Aussie! After closing the weekend gaps it created, it resumed its northern course up the charts.

Let’s see if it has enough steam to continue its good run this week.

Tomorrow at 1:30 am GMT, the NAB business confidence report will be available. Any reading above 0 already indicates improving conditions, so expect investors to get even more bullish if August outperforms July by posting a reading higher than 2.

Then on Wednesday, Westpac publishes its consumer sentiment report. Will we see an improvement from August’s reading of 119.2? Find out at 12:30 am GMT!

Watch for the release of the MI inflation expectations figures on Thursday at 1:00 am GMT. July’s figures revealed that consumers were expecting prices to increase by 2.8%. If August posts higher results, the Aussie could be in for an extended bull run as inflation expectations have a tendency to turn into real inflation.

We end our week on Friday with a speech from RBA Assistant Governor Dr. Philip Lowe. See what he has to say at 3:34 am GMT because he might just hint at future monetary policy moves.

Good luck out there, folks! May the pips be with you!

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Oh Aussie, how traders love thee! Thanks to another the risk appetite pill, the Aussie was able to mark its fourth consecutive day of gains in yesterday’s trading session. After gapping up to kick off the week, AUDUSD continued to trek higher throughout the day to end the US trading session at its highest level since May at .9358.

In addition to risk appetite, the Aussie also found support from the optimistic NAB business confidence survey. It came out with a reading of 11 for the month of August, significantly higher from September’s 2.

No report coming out today from Australia, but do expect to see Westpac’s consumer confidence survey at 12:30 am GMT tomorrow. If the actual figure for September comes in above August’s reading of 119.2, the Aussie could stage another bull run!

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Make that five consecutive days of wins! Thanks to a broad-based dollar sell-off, AUDUSD was able to stage a stellar performance and post new year-to-date. The pair went as high as .9458 – its highest level since November 2009 – before giving up some of its gains.

There were a couple of reasons for AUDUSD’s super rally. First, rumor has it that the Fed will announce its second round of quantitative easing as early as November. Secondly, believe that China could allow the yuan to appreciate at a wider band against the dollar. And lastly, gold prices managed to rush to record highs.

No data coming out of Australia today, but just like yesterday, keep an open ear to news from other major economies! Pay particular attention to the release of the Empire State manufacturing index from the US, as better-than-expected figures could trigger risk appetite and push AUDUSD higher… again.

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It ends at five! The Aussie finally ran out of gas and posted a loss against its American counterpart. AUDUSD traded sideways for most of the day, hanging in the area of two-year highs. But buyers couldn’t keep it from slipping as the pair closed 34 pips lower for the day at .9384.

From the very beginning, the Aussie faced an uphill battle. The Westpac consumer confidence data released early in the day weighed it down as it dropped from a reading of 119.2 to 113.2 in September. As this report is a leading indicator of consumer spending, a decline in it can’t be good news for the economy.

This just in, folks! The August Melbourne Institute inflation expectations report that came out just minutes ago says that consumers believe prices of goods and services will increase by 3.1% over the next 12 months! This marks a 0.3% increase from the previous month. Perhaps this bit of positive data may give the Aussie more fuel to resume its uptrend, eh?

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The Aussie joined its comdoll homies in watching the dollar munch on their pips in yesterday’s trading. AUDUSD traded within a 64-pip range, closing 16 pips lower at 0.9368.

Apparently, the better-than-expected figures that we saw on Melbourne Institute’s inflation expectations report for August which came in at 3.1% and beat July’s 2.8% reading, wasn’t enough to get the Aussie rockin’ and rollin’ n the charts.

We don’t have anything on tap for the Aussie today. So, be sure to gauge the market’s risk sentiment when you make your trades, aight?

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“Let’s go Aussie, let’s go,” cheered the bulls as AUDUSD soared to a fresh two-year high at 0.9469 last Friday. Whoohoo! However, it seems like the Aussie didn’t get much lovin’ after the European session closed as AUDUSD went on a downtrend, ending the day with 5 pips lower at 0.9362. Tsk, tsk…

Without anything on tap for the Aussie, it was left vulnerable to the market’s sentiment. It was able to hustle early on Friday because a handful of traders we’re feeling giddy about the economic reports from Europe and US. But then the actual German PPI and University of Michigan Sentiment reports came in worse than expected and that spelled trouble for the high-yielding Aussie.

Today, RBA Governor Stevens is scheduled to talk in Shepparton at 3:30 am GMT. You may want to tune in to his speech because he may just give some hints on the bank’s future interest rate decisions. Oh, remember that the minutes of RBA’s most recent meeting is due tomorrow at 1:30 am GMT. If you keep an ear out for Stevens’ speech, you may be able to brace yourself better for tomorrow’s much anticipated report.

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Someone’s been pumping iron lately! The Aussie gave a powerful performance yesterday as it muscled its way against the Greenback. AUDUSD started the week off strongly, closing at .9467 and forging a new monthly high as it recorded a 104-pip gain for the day.

Yesterday’s headliner was RBA Governor Stevens’ big speech. In it, he said the RBA is considering another rate hike, maybe even before the year ends. No wonder traders were so eager to buy the Aussie! It looks like Australia’s recovery is well under way.

He gave bulls further cause for celebration when he said that the business sector is healthy, and that Australia is set to experience “the largest minerals and energy boom since the late 19th century.” Now, if that doesn’t get you all giddy, I don’t know what will!

Today, Australia will be publishing the latest MPC meeting minutes. Let’s see if the committee shares Governor Stevens’ hawkish sentiments at 1:30 am GMT!

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Whoa! Was there an earthquake yesterday? Or did the Aussie just rock my world after it hit a fresh two-year high against the dollar at 0.9565? Ha! Too bad the com-doll wasn’t able to hang on to its peak as it closed a tad bit lower at 0.9535. But that’s still a 69-pip win so, whoohoo!

Unlike the US Federal Reserve, traders found the RBA’s tone from its most recent meeting upbeat enough. Why? Well, let’s just say that the central bank is inclined to more rate hikes, thanks to the resource sector fueling Australia’s economic growth. Boo yeah!

There’s a good chance that the Aussie will continue its rock and roll up the charts given positive figure printed by the Melbourne Institute Leading Index, which came in at 0.4% in July and pared its 0.1% decline in June.

But wait! I read in Forex Gump’s blog yesterday that Portugal’s bond auction is scheduled today. Hmm, the outcome of the auction may cause a shift in the market’s risk sentiment, so I guess we better watch out for that.

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Somebody call the SWAT team because the Aussie’s the BOMB! Yesterday, AUDUSD posted hit a new two-year high at 0.9600 before ending the day at 0.9568. The comdoll bagged 32 pips from yesterday’s trading, stacking up its gains against the dollar this week to a total of 205 pips! Sha-bam!

The Melbourne Institute Leading Index for July which came in at 0.4% and erased its 0.1% decline in June, was definitely a good complement to the anti-dollar sentiment of the market.

Hmmm, I wonder if the stellar figure will be enough to keep traders head over heels for the Aussie given that we don’t have anything on tap for it for the rest of the week.

Yeah, you read that right. No economic reports from Australia left so be sure to gauge the market’s risk sentiment first before you make your Aussie trades, aight? Also take note that profit-taking may limit the Aussie’s rally up the charts.

Good luck and may the pips be with ya!