Daily Economic Commentary: Australia

AUD/USD bounced back and forth support at 1.0470 and resistance at 1.0550 all throughout yesterday’s trading. Boing, boing, boing! But at the end of the day, the pair settled 39 pips higher from its opening price at 1.0547.

We saw mixed figures on the economic front yesterday. Melbourne Institute’s Inflation Expectations report for March showed that consumers see that prices will rise at a slower pace of 3.5%, compared to the 3.6% uptick we saw in February.

On the other hand, it was reported that new motor vehicle sales rose by 3.4% in March following its measly 0.2% reading for February.

Good thing market sentiment was on the Aussie’s side as dovish comments from the Fed and worse-than-expected data from the U.S. had traders hatin’ on the dollar. Hmmm, with nothing scheduled on our economic calendar from Australia today, I have a feeling Aussie bulls will have to get their cue to run from the market’s mood. So make sure you gauge the sentiment!

What a snoozer! Having no economic data to bust a move to, the Aussie was virtually lifeless on the charts last Friday. AUD/USD traded sideways for the entire day, eventually closing just 14 pips higher at 1.0561.

Even though it had no Australian news to back it up, the Aussie was able to keep its head above water as rising commodities helped counter the round of risk aversion brought about by fears of further monetary policy tightening in China. With inflation and output surpassing forecasts in China, many believe we’ll see further tightening from the economic giant, which could result in a growth slowdown down the line.

This week, the two biggest events to look out for are the release of the monetary policy meeting minutes and the quarterly PPI report. Though we already know that the RBA decided to hold rates steady in its last rate decision, the minutes could provide additional insight on the state of the economy, so be sure to catch it at 1:30 am GMT tomorrow.

Also, the quarterly PPI report is due on Thursday at 1:30 am GMT. Economic fortunetellers say we’ll probably see a 1.0% rise in producers’ finished goods, in contrast to the soft 0.1% uptick in Q4 2010. Expect the markets to get bullish if this baby prints even higher than expected.

Good luck and peace out, homies!

The Aussie ain’t no Lady Gaga in a motorcycle, but along with other commodity currencies, it got slammed by risk aversion in yesterday’s trading. AUD/USDtumbled to a low of 1.0454 before closing the day at 1.0512 with a 36-pip loss.

The com-doll fell victim to the dollar’s strength amid the lack of economic data from Australia. It also didn’t help that commodity prices softened and risk aversion reared its ugly head back in the markets. Hmm, I wonder how the minutes of the most recent RBA meeting will factor in to the Aussie’s moves on the charts today.

Earlier, reports cited that the central bank didn’t see any immediate need to start hiking interest rates. Boo! On the bright side though, it seems like RBA Governor Glenn Stevens and his buds see a lot of strength in the Australian economy.

We don’t have anything left on tap for the Aussie today so make sure you keep tabs on market sentiment. Remember that the com-doll usually rallies in times of risk appetite!

Similar to other major currencies, the Aussie was able to take advantage of the dollar’s weakness yesterday. After falling to 1.0443 intraday, the bulls bought it up like crazy and managed to push it back to 1.0518 by the end of the day.

The Aussie’s climb was mainly the result of improved market sentiment. Earlier today, the MI leading index, which measures the direction of Australia’s economy, rose to 0.4% after the 0.3% seen the month prior. Import prices also supported the currency. It showed that prices climbed 1.4%, almost double the figure initially expected.

Nothing left on Australia’s economic calendar today, but we will see the existing home sales report from the U.S. Keep a close eye on that report, as it could serve as a catalyst for another Aussie rally!

Someone call the fire department because the Aussie is out of control! Better-than-expected economic reports from Australia and a surge of risk appetite in markets pushed AUD/USD to a fresh record high of 1.0692 yesterday, with the pair capping the day at 1.0678.

As I mentioned yesterday, Australia’s leading index figures in February showed that the economy is still expected to be on a roll, while reports on import and export prices add more pressure on the RBA to raise its interest rates. The icing on top of the Aussie’s sweet ginormous cake is the surge in risk appetite in markets which boosted all of the comdolls against the Greenback.

Today all Aussie traders will keep their eyes on the impact of Australia’s stronger-than-expected PPI report for the fourth quarter. The data printed a 1.2% growth for the fourth quarter, beating expectations of only a 1.0% rise. Will this be enough to push AUD/USD to 1.0800 and beyond?

Not one to get left behind, the Aussie joined the snoozer bandwagon and decided to chill on the charts last Friday. AUD/USD stayed within a narrow 35-pip range as the lack of economic data had everyone feeling sluggish.

The Aussie may not have whooped it up last Friday, but that doesn’t mean we’ll see the same from the comdoll this week!

Australia will be out on holiday today, but it does have some heavy reports coming out later in the week.

At the stroke of midnight (GMT), it will be publishing the CB leading index, which printed a reading of 0.1% for the month of January. If February can show an improvement in this index, it could be enough to spark a mini rally.

The report to keep an eye on this week is the quarterly CPI, which is due 1:30 am GMT on Wednesday. Forecasts have Australian inflation clocking in at 1.2% in Q1 2011, a nice rise from the 0.4% uptick seen in Q4 2010. If this report prints higher than expected, it could spur Aussie buying and dictate price action for the rest of the week!

After surging to new all-time highs late last week, the Aussie finally gave back some of its gains in yesterday’s trading showdown. AUD/USD went as low was 1.0684 before recovering a little bit to end at 1.0722, down just 21 pips for the day.

Earlier today, the CB leading index came in at 0.6% for February, up from the 0.1% figure we got for January. The improvement can be attributed to a sharp rise in rural goods exports, which were relatively flat for the past few months. In any case, the rise in the index predicts improving conditions in the Australian economy.

No major news coming out today, but watch out tomorrow, when quarterly CPI figures will be released at 1:30 am GMT. Inflation is forecasted to have jumped up to 1.2% during the first quarter, up from the 0.4% the quarter before. Take note though, that the Australian Bureau of Statistics has been off target lately, as inflation has failed to hit the estimate figure for the past FOUR quarters. Will tomorrow make it 5 in a row?

When there’s a will, there’s a way! After losing out a couple of pips on Monday, the Aussie bulls decided to finally step up their game and fight back yesterday. By the end of the U.S. trading session, the Aussie bulls were able to take AUD/UDS to 1.0781, almost 60 pips higher from its opening price during the Asian session.

Risk appetite was the main driver behind the Aussie, as the S&P 500 rallied to its highest level since 2008. Earlier today, the Aussie received another boost, but this time it came in the form of the consumer price index. The country’s consumer price index came in significantly above expectations as it printed a 1.6% figure. The forecast was for a mere 1.2% rise.

Nothing due on Australia’s economic calendar today, but that doesn’t mean we won’t be seeing any action! At 4:30 pm GMT, the FOMC will announce its decision on interest rates. The announcement usually has a big impact on AUD/USD’s price action, so make sure you’re prepared!

Thanks to positive inflation reports from Australia and US Fed Chairman Ben Bernanke’s speech yesterday, AUD/USD blasted through possible resistance levels and went on to make new highs. Boo yeah! The pair started rising almost as soon as the day started, and closed 90 pips above its open price. At this rate, the Aussie will reach 1.0200 before you know it!

Yesterday Australia released its CPI figures, which showed a 1.6% increase in the fourth quarter. Since the growth rate is not only better than the expected 1.2% rise, but is also the fastest we’ve seen since the third quarter of 2008, AUD/USD jumped by 50 pips at the release of the report!

And then, of course, there’s the FOMC meeting minutes and Ben Bernanke’s speech. In Bernanke’s press conference he announced that the Fed plans to continue reinvesting its earnings from maturing securities starting in June when its QE2 program is scheduled to end. This sent a huge relief to markets, and boosted risk appetite and the high-yielding Aussie.

The economic boards are empty in the Land Down Under today, but stay sharp for any reversals in the Aussie pairs! We might see some traders take profit just before the US GDP is released today at 12:30 pm GMT.

Is there no stopping the Aussie? For the 3rd consecutive day, AUD/USD rallied up the charts, breaking another psychological round figure (1.0900) along the way. The pair rose 56 pips to find itself closing at 1.0927. Is 1.1000 out of the question?

Over the past two months, the Aussie has been on a massive rally. Top put things in perspective, after hitting a February low just above .9700, AUD/USD is now at 1.0900, up 1,200 pips! Wicked sick! With a high interest rate and with gold on the rise, things are certainly looking up for the Aussie right now.

No major news coming up, but do take note that it is the last day of the trading month. We may see some traders call it a month and lock in some profits, so be careful out there!

Up, up, and away! Rising commodity prices and continued dollar weakness in markets pushed AUD/USD higher for the fourth day in a row last Friday, boosting the pair to a new high 34 pips higher than its open price at 1.0961. Looks like the Aussie bulls just can’t be tamed! Oh wait, I think that’s the teen pop idol Miley Cyrus that Happy Pip was talking about…

Maybe the better-than-expected private sector credit boosted the bulls’ moods when it printed a 0.6% growth in March when markets were only expecting a 0.4% growth. Meanwhile, February’s data was revised higher from 0.5% to 0.6%. And don’t forget that the dollar continued to plunge across the board just as commodity prices were also breaking records!

Let’s see how markets will react to today’s reports from Australia. Data released a couple of coffee cups ago revealed that the AIG manufacturing index inched higher towards the expansionary signal of 50.0 at 48.4 in April, while the MI inflation gauge, the price of good and services purchased by consumers, slipped from its 0.6% figure in March to 0.3% in April. Does this mean that inflationary pressures are easing in Australia?

At 1:30 am GMT we’ll get hold of the house price index for the first quarter, and we’ll also see at 6:30 am GMT if the commodity prices report will reflect the soft MI inflation gauge report. Make sure you pay close attention to the Aussie price action! We’ll never know how many bulls take profit before tomorrow’s RBA interest rate decision.

“Man, that 1.1000 handle is tough to break!” complained AUD/USD yesterday after two failed attempts to rally past the major psychological resistance. It didn’t help that news of Osama bin Laden’s death spurred a U.S. dollar rally then. Australia will take center stage today so let’s see how the Aussie will fare.

Hold on to your hats because the RBA is set to make its rate decision at 5:30 am GMT today. The market consensus is that the central bank would keep rates on hold at 4.75% but strong inflationary pressures could force them to tighten their monetary policy. As my buddy Forex Gump pointed out in his article about interest rate decisions this week, Australian annual inflation is already at 3.3%, which is way above the RBA’s 2-3% target range. A rate hike could be enough to push AUD/USD past 1.1000 but if the RBA disappoints, the Aussie could give in to U.S. dollar buying.

No thank you RBA! The Aussie found itself losing ground across the board due to the not-as-hawkish-as-before interest rate statement of the RBA yesterday. AUD/USD fell to 1.0863 from its open at 1.0942 while AUD/JPY dropped to 87.30 from 87.69.

In its statement yesterday, the Reserve Bank of Australia (RBA) said that they have decided to keep interest rates unchanged for the fifth straight month at 4.75%. According to the RBA, they didn’t need to raise rates because the high exchange rate of the Aussie is enough to contain inflation for the next few quarters. This also meant that we probably won’t see any rate hikes for two quarters at least.

Later, at 1:30 am GMT, two important economic reports will be released.

The first one is the retail sales report. The retail sales report usually has a positive correlation with price action, which means that results that beat forecast result in a rally in the Aussie. The market expects a 0.6% gain after the 0.5% increase seen the previous month. The second one report that will come out is the building approvals. It is predicted to show that approvals rose 5.2% in March, opposite the 7.4% decline in February.

The Aussie just couldn’t seem to catch a good wave yesterday as it sank against both the Greenback and the Japanese yen. Risk aversion wiped out AUD/USD’s recent gains, pushing the pair below the 1.0800 handle to a low of 1.0735. AUD/JPY fared even worse as it fell almost 200 pips from an intraday high of 88.15.

Australian new home sales, as reported by the Housing Industry Association, were up by 4.6% in March. This was a huge improvement over the 0.6% uptick seen in February, yet the HIA chief economist remarked that Australia has a long way to go before home sales land back at healthy levels.

Later on, the Aussie seemed to lose its cool when weak economic data started coming in from the U.K. and euro zone. This forced traders to flee to the safe-havens, causing Aussie pairs to lose ground. The sour mood even worsened when the U.S. unveiled a couple of weak reports during the U.S. session.

Let’s see if the Aussie can get back on its feet when Australia releases its building approvals and retail sales reports today. Building approvals are expected to show a 5.1% rebound in March, erasing part of the 7.4% decline seen last February. Meanwhile, retail sales are estimated to print a 0.6% uptick in March, slightly higher than the 0.5% rise the month before. If you’re up at 1:30 am GMT, you might want to trade those reports!

Down she goes… again! The Aussie seems to have lost its legs as it just keeps falling day after day! Without support from commodities and economic data, AUD/USD posted its fourth consecutive slide, falling 174 pips to 1.0562.

You can’t help but cringe over the nasty fall the Aussie took on the spill in commodities yesterday. It seems that with risk aversion back in fashion, traders were more interested in safe haven currencies rather than higher-yielding ones.

Sadly, yesterday’s economic releases weren’t able to cushion the Aussie’s fall.

While building approvals climbed 9.1% in February, a VERY nice improvement from the 5.3% dip the previous month, retail sales data wasn’t quite as upbeat. The retail sales report for February printed a 0.5% decline, which is practically the exact opposite of the 0.6% growth the markets were hoping to see.

Obviously, Australian consumers are still very cautious about spending. I wonder if the RBA will take this as a sign to push back any plans to hike rates in the near future.

Keep in mind that earlier this week, the RBA said it’ll be focusing on business investment, income, and employment as its basis for tightening policy. But you can’t very well expect businesses to grow and income and employment to pick up if sales are weak, can you?

In any case, we can’t completely rule out the effect of inflation on the RBA’s rate decisions. In the RBA’s monetary policy statement held earlier this morning, it announced that inflation is expected to reach 3% by December 2011, instead of December 2012 as it had forecasted in February. This might just be enough to cause the central bank to act earlier.

No more reports from Australia today, but do keep a close eye on the U.S. and its NFP report!

Aussie bulls unite! After days of dropping in the charts, AUD/USD finally caught a break and edged higher on Friday. The pair even hit an intraday high of 1.0803 before capping the week 140 pips above its open price at 1.0693.

The Aussie got a boost early in the day when the RBA statement revealed that the RBA sees more interest rate hikes “at some point” especially if strong mining investment puts enough pressure on inflation.

Around the U.S. session almost all high-yielding currencies (including the Aussie) rode the risk appetite train when the big NFP report showed surprised to the upside with 244,000 new jobs instead of the expected 185,000 figure. Never mind that the unemployment rate also rose to 9.0%!

Will the Aussie continue to rise in the charts this week? Economic data from Australia will kick off today at 1:30 am GMT when the ANZ job ads is released.

Then on Tuesday at 1:30 am GMT we’ll get hold of Australia’s trade balance figures and the NAB business confidence report, followed by the Australia Treasury’s annual budget figures at 9:00 am GMT.

Last to pop out from the Land Down Under are the unemployment and employment change reports on Thursday at 1:30 am GMT. Markets are expecting the jobless rate to remain at 4.9% in April, but keep your heads up for any surprises!

Make that back-to-back, baby! The Aussie followed up its awesome performance last Friday with an equally impressive performance yesterday. After gapping up to start the week, AUD/USDcontinued to rally, eventually ending the day 69 pips higher at 1.0788.

Just like playmaker Rajon Rondo, the ANZ job ads report dealt the Aussie an assist in its campaign yesterday. According to the report, even with the unemployment rate already at a lowly 4.9%, the labor market continues to show improvements. Job advertisements climbed 1.0% last month, almost a repeat of the 1.3% growth we saw in March.

Unfortunately, the good vibes from the labor market were sort of cancelled out by low business confidence as the NAB business survey ticked down from 9 to 7 last month.

I hope you didn’t blink 'cause you would’ve missed Australia’s only hard data release for today! Just a few minutes ago, word spread that Australia’s trade deficit of 90 million AUD disappeared and was replaced by a trade surplus to the tune of 1.74 billion AUD. This is awesome news considering forecasts were only expecting a surplus of 490 million AUD!

But don’t feel bad about missing that report 'cause you’ll get another chance to trade an Australian event later at 9:30 am GMT when the government releases its annual budget release. Market nerds worldwide are anxious to see what the government has up its sleeves, but rumors say we could see big budget cuts. If what they say is true, and the government does plan to slash a big chunk of its spending, it may result in a lower GDP and weaker Aussie down the line.

Thanks to some positive data and stronger commodities trading, the Aussie got a nice boost up the charts, with AUD/USD gaining a decent 48 pips to finish at 1.0836. For those of you counting at home, that makes three consecutive days of gains. Will today make it four?

After releasing trade balance figures earlier in the day, the government went ahead and released their planned budget for the upcoming year. According to Treasurer Wayne Swan, the government plans to scrimp on their spending year, as they feel that the rising AUD and local and foreign natural disasters could weigh down the economy.
Swan did say though, that the government expects to post a surplus during the 2012-2013 fiscal year, as Australia’s booming mining industry and an improved economy should bring in some moolah.

The news of a wider deficit and austerity measures didn’t exactly weigh down the Aussie, as we saw a nice rebound in commodity trading during the U.S. session. Remember, one of Australia’s largest export industries is natural resources (a.k.a commodities). So whenever commodities do well, we normally see the same in Aussie trading.

No data on deck today, but keep an eye out on commodities trading. Take note that oil and gold have bounced off key support levels. If we see continued buying in those commodities, we may just see the Aussie get a nice boost up the charts!

Can you guess what song was on loop in the Aussie’s playlist? I’m willing to bet it’s Adele’s “Rolling in the Deep” because that’s exactly how the Aussie moved yesterday! AUD/USD fell short of the 1.0900 handle then tumbled by more than 200 pips to a low of 1.0664 while AUD/JPY found resistance at 88.00 and closed at 86.38. Find out what caused the Aussie’s sharp drop.

The Aussie seemed to have it all at first when it edged higher despite the mixed Chinese economic data, but it played to the beat of risk aversion after the U.S. released a weak trade balance. Perhaps traders had a tough time interpreting the results of the Chinese spending and inflation reports which printed an annualized 17.1% rise and a 5.3% increase respectively. We never know what the PBoC will be up to this time!

Today Australia is set to release its jobs reports, which could show a 17,600 increase in hiring for April. This would be much less than the 37,800 employment change figure posted last March, which implies that the Australian jobs market is seeing a bit of a slowdown. But hey, an increase in employment is still an increase in employment! This could keep the jobless rate steady at 4.9% for the month, but if the actual figure falls short of expectations, the Aussie could keep rolling in the deep! Keep an eye out for that report due 12:30 am GMT.

If you’re trading AUD/USD, make sure you also stay tuned for the release of the U.S. consumer spending and inflation reports later on. I’m sure y’all saw how the weak U.S. trade balance damaged risk appetite yesterday and we might just see the same scenario today. Stay on your toes, everyone!

Gas price, as well as commodity prices continuously rises each day. The political chaos in the Middle east triggers prices to rice rapidly.