Daily Economic Commentary: Australia

Big ups to the Aussie for staging a comeback and pulling off the last minute win over the Greenback! After taking an early hit from weak employment data, the Aussie rallied late in the New York session with help from improved risk appetite. As a result, AUD/USD was able to close at 1.0629 after hitting an intraday low of 1.0563.

The Aussie had a difficult time overcoming the red employment change figures, but it was able to pull it off! Last month only saw a total of 7,800 jobs added, which is less than a third of what forecasts predicted.

But before you start feeling sorry for our buddies in the Land Down Under, remember that Australia’s labor market is far from weak! After all, it boasts of an unemployment rate of just 4.9%, something none of the G7 countries can do at this point in time.

Nothing on the economic calendar for Australia today! In the meantime, keep your eyes on risk sentiment!

You can run but you can’t hide from risk aversion, Aussie! Just like all higher-yielding currencies, the comdoll fell victim to market sentiment last Friday and traded lower against the dollar. AUD/USD opened at 1.0629 and tumbled to its closing price at 1.0550.

With that, the Aussie extended its losses to 164 pips against the dollar for the week. Ouch!

Aside from Europe’s sovereign woes, the worse-than-expected trade balance report from China might have also fueled risk aversion. It was reported that Chinese exports outpaced imports by 13.1 billion USD and fell short of the market consensus which was for a 19.8 billion trade surplus. Naysayers are now starting to doubt if the Chinese economy can continue picking up the slack in U.S. growth much longer. Uh-oh…

The disappointing jobs report from Australia that we saw on Thursday might have also continued to weigh down the Aussie on Friday.

Today is a holiday in the Land Down Under so there are no economic reports on tap for the Aussie. Make sure you keep tabs on market sentiment, ayt?

Tomorrow we’ll have the NAB Business Confidence report for May along with a roster of Chinese data. A figure higher than the 7.0 reading we saw for April will probably be bullish for the currency. Make sure you don’t miss the report when it’s released at 1:30 am GMT tomorrow. Good luck!

Who’s the champ? The Aussie’s the champ! Despite the empty economic calendar, the Aussie was able to stage a magnificent rally yesterday and close the U.S. trading session with a respectable 65-pip win versus the dollar. Hah, that’s risk appetite for ya!

Earlier today, the Aussie once again managed to rise across the charts due to a strong reading on the Chinese consumer price index (CPI). It showed that China’s inflation rate is now at 5.5%, higher than the previous month’s 5.3%. Australia and China are major trading partners, so positive data from China typically helps the Australia too.

No data for the rest of the day, so look at economic releases from other major economies to dictate the Aussie’s price action. Pay special attention to the U.S. producer price index (PPI) and retail sales report at 12:30 pm GMT, as those report tend to have an indirect effect on the Aussie.

Surf’s up forex mates! With a wave of risk appetite hitting the market, the Aussie found itself climbing up the charts! AUD/USD rose 78 pips to close at 1.0680, marking the second consecutive day of gains. Can the bulls make it three in a row today?

The Aussie got a nice boost during the New York session, as risk appetite picked up once retail sales data was released. The markets are all about risk sentiment right now baby! If we continue to see good news prop up around the world, look for the Australian dollar to be one of the major beneficiaries.

Take note that today is Wednesday, so we may see a potential midweek reversal. In fact, the Aussie is already down as I speak, thanks to a disappointing release of the Westpac consumer sentiment report. Earlier today, we saw that the index decreased by 2.6% from levels a month ago. This indicates that confidence is still wavering in the Land Down Under as the country undergoes its own recovery.

Watch out for all the data that’s coming out from the U.S. We’ve got a slew of reports coming out so we will probably see some wild moves during the New York session!

The Aussie was driven lower yesterday as risk aversion managed to make its way back into the foreign exchange market. After it had opened the day at 1.0683, AUD/USD experience a huge sell-off and closed the day very weak at 1.0563. The pair clocked in a huge 120-pip loss.

The bout of risk aversion was bought in by none other than Greece. The emergency meeting of EU finance ministers about Greece’s bailout ended in deadlock yesterday, which led market participants to question whether the second bailout will actually go forward.

No red flags on Australia’s forex calendar today, so don’t expect any wild moves from the Aussie during the Asian and European trading sessions. However, do keep your eyes peeled when the U.S. trading session rolls along. The U.S. is scheduled to release a number of important economic reports, which could have a huge indirect impact on the Aussie’s price action.

The Aussie chalked up another losing day against the Greenback and the Japanese yen as risk aversion loomed like a dark cloud over the markets. Still, AUD/USD was able to keep its head above the 1.0500 level while AUD/JPY closed right at 85.00. Today’s set of economic reports could determine whether these support levels will hold or break.

Unfortunately, the Australian dollar won’t be able to rely on data from the Land Down Under today since their economic calendar is empty. Yesterday’s set of lukewarm reports from Australia, namely the MI inflation expectations and the new motor vehicle sales, probably won’t be enough to support the Aussie today.

With that said, risk sentiment could drive the Aussie’s price action again. Good luck and happy trading!

Saved by risk appetite! While Australia was chillin’ like a villain with no economic reports released last Friday, a wave of risk appetite in markets cheered the Aussie into driving AUD/USD 77 pips higher than its open price at 1.0618.

One of the main reasons why high-yielding investors came out of their siestas is the easing of Greece’s debt problems. Last Friday German Chancellor Angela Merkel gave an inch against the ECB and agreed for Germany to let up its calls for participation of international banks. Hey, at least they’re getting somewhere!

Another booster for the Aussie last Friday was the rise in gold prices. Gold firmed above the psychological $1,500 per oz. mark, which turned positive for the gold-related Aussie.

Will the Aussie bulls keep their momentum this week? Though no economic reports are scheduled today, Australia will be releasing its MI leading index report tomorrow at 12:30 am GMT, with the RBA’s monetary policy meeting minutes following suit at 1:30 am GMT. Since the RBA was surprisingly dovish on its last interest rate statement, we expect the RBA minutes to be dovish as well.

The CB leading index report on Thursday at 12:30 am GMT is the last report scheduled for this week, so make sure you keep close tabs on risk sentiment! The European officials had a pretty long tea party last weekend, so all eyes will be on whether or not they’ve reached a concrete bailout plan for Greece.

If whatever they decide satisfies both the credit ratings agencies and the market junkies, then we just might see more comdoll bulls come the Aussie’s way. Watch out for that!

The Aussie rode the risk aversion wave yesterday when the lack of progress on a possible bailout plan for Greece made the high-yielding investors jittery. AUD/USD dropped to an intraday low of 1.0497 before capping the day with only a 30-pip loss at 1.0569.

Though word got around that Russia is interested in loading up on the Aussie, it weakened against the dollar on a wave of risk aversion in markets. Apparently, traders weren’t satisfied with the euro zone officials’ lack of progress over a possible bailout plan for Greece.

Will the Aussie have its chance today? Australia’s RBA is set to release its monetary policy meeting minutes today, and given that it kept its interest rates steady at 4.75% last month, we might see some dovish statements. Still, keep your eyes peeled for any surprises!

If there’s one major currency that knows how to make a strong finish, that’s the Australian dollar! AUD/USD may have been off to a weak start but it was able to recoup its losses and end 34 pips higher than its 1.0569 open price. AUD/JPY was also able to walk off with a slight gain as it closed right at the 85.00 handle.

The Australian dollar took a slight hit during the Asian session when the minutes of the latest RBA monetary policy meeting revealed that central bank policymakers weren’t ready to hike rates yet. Although RBA Governor Glenn Stevens remarked that interest rates need to be hiked at some point, he estimated that GDP probably fell by 1.2% in the first quarter. Policymakers also noted that inflation is currently at the lower half of their target range, which supports their decision to keep rates steady for the meantime.

But just when AUD/USD seemed ready to break below the 1.0500 handle, improved risk appetite provided a boost for the pair. Developments in the euro zone, particularly in Greece, led traders to hope that they will find a solution for their debt problems really soon. Just check out my euro zone commentary to find out what happened in the region.

Aside from that, Fitch’s warning to Uncle Sam also triggered a U.S. dollar selloff. If you wanna know the scoop, it’s all in my U.S. economic commentary!

Only the MI leading index is due from Australia today and this report is only expected to have a mild effect on the Aussie’s price action. Still, it wouldn’t hurt to see how this could turn out, right? The index has been rising since January this year and it logged a 0.5% reading for March. If the April reading comes in higher than that, we might see the Aussie go for another rally. Stay tuned for the actual figure due 12:30 am GMT!

Similar to other major currencies, the Aussie found itself on the back foot against the dollar yesterday due to a more upbeat FOMC statement. AUD/USD ended the U.S. trading session 1.0572, a good 79 pips lower from its intraday high.

The FOMC, which was expected by the market to just echo the previous statement, actually came in with some positive comments. It said that while growth was still weaker than expected, it would probably get better in the next couple of quarters.

It also dropped the words “subdued inflation,” which was seen by the market as a slightly hawkish stance on monetary policy. The most important takeaway from the statement, however, was the absence of signs of another round of stimulus measures (i.e., QE3).

No important economic data release from Australia today, so the Aussie’s price action will be moved mainly by news coming out of major economies. Pay particular attention to the release of the U.S. initial jobless claims (12:30 pm GMT) and the new home sales report (2:00 pm GMT)!

Argh! The Aussie seemed frustrated with losing two days in a row against both the Greenback and the Japanese yen. Still, AUD/USD fought hard to stay above the 1.0500 handle while AUD/JPY closed at 84.85. Can the Aussie bounce back before the end of the week?

Risk aversion weighed the higher-yielding Australian dollar down during yesterday’s trading as several major economies churned out weaker than expected economic reports. Even though Australia’s CB leading index showed a 0.1% uptick for April, erasing the 0.1% decline seen last March, the Aussie wasn’t spared from a beating by the safe-haven currencies.

There aren’t any economic reports on Australia’s schedule today but RBA Assistant Governor Philip Lowe is set to testify at 3:30 am GMT. Keep your eyes and ears peeled from any dovish comments from this central banker because those could drag the Aussie even lower. Good luck!

Poor Aussie! Traders didn’t want anything to do with it as risk aversion remained in play last Friday. Has it recovered since then?

So far, it seems like things are getting worse rather than better for the Aussie! It gapped down against the Greenback to start the week as AUD/USD is now well beyond the 1.5000 major support level. With no Australian reports to blame the Aussie’s dip on, we can reasonably assume that the Aussie selloff was a result of a classic case of risk aversion.

Unfortunately, we don’t have any Australian reports coming out today, and the rest of the week offers nothing more than tier 2 reports. That being the case, stay on your toes because the Aussie’s movements will most likely be dictated by risk sentiment in the meantime.

Be sure to monitor developments in the euro zone closely. I hear the Greek parliament is set to make a big announcement early this week. If they pass the austerity package, it might restore confidence in the euro zone and spur risk appetite and Aussie buying!

Ooomph! For the fourth day in a row, AUD/USD took a trip down the charts on lingering risk aversion and a bit of dollar appetite in markets. The pair even dropped to an intraday low of 1.0391 before capping the day with a 42-pip loss at 1.0439.

No economic report was released from the Land Down Under yesterday, but that didn’t stop the Aussie bears from attacking! Hmm, is it because New Zealand and Canada all released bearish news yesterday? Word around the street is that Canada’s Finance Minister Jim Flaherty is worrying about the global economy, while New Zealand printed a weak trade balance report.

Aside from RBA Assistant Governor Guy Debelle speaking in Sydney today at 1:00 am GMT, the economic boards are once again empty in Australia. But don’t worry, there will be plenty of other news reports on tap today, including the current account report in the U.K., and even the CB consumer confidence in the U.S. And while you’re at it, make sure you also keep a close eye on risk appetite. Word on the street is that it’s about to make a comeback!

Up, up, and awaaay! The Aussie was one of yesterday’s biggest gainers as risk appetite launched its skyward. Will we get a repeat performance today?

Thanks to improved risk appetite, the Aussie found itself over 100 pips higher against the Greenback.

No reports to work with today! In the meantime, remember to tune in when the Greek Parliament votes on its austerity package later on. It might spur another risk rally if they decide to pass the package. That’s all for today, folks! Good luck!

When the Aussie is on, it is ON! Riding a sweet wave of risk appetite, AUD/USD boogied up the charts, rising a solid 126 pips to close at 1.0676! Cowabunga baby!

Even with no data scheduled for release, the Aussie found itself much higher against the U.S. dollar as risk sentiment continued to improve. As long as the dollar remains weak and commodities remain steady, we can expect the Aussie to keep its head above water.

In other news, private sector lending data was released earlier today. Lending grew by just 0.3% over the past month, slightly less than the anticipated 0.4% increase. Still, this was a nice improvement from May, when there was no growth at all. As long as lending increases steadily, it should reflect well on the Australian economy, as it would mean that the businesses have access to more cash.

Cowabunga! Aussie bulls caught another wave of risk appetite and cruised up the charts in yesterday’s trading. AUD/USD tapped an intraday high of 1.0751 before ending the day 49 pips higher from its opening price at 1.0724.

The only economic report we had from Australia was on private sector credit which showed that the total value of credit issued to consumers in June grew by 0.3%. It was lower than the 0.4% uptick that analysts had predicted but with all the positive vibes from Europe, the report didn’t really weigh down the comdoll.

Today we have a couple of reports on tap. Earlier the AIG manufacturing index for June came in higher at 52.9 than its 47.7 reading for May.

Later, data on commodity prices for the same month will also be released at 6:30 am. A figure higher than the previous reading of 29.4% would probably be bullish for the currency. Remember that commodities comprise about half of Australia’s export revenues. Therefore, a positive figure could also translate to a bigger trade balance for the country. Good luck!

Aussie! Aussie! Aussie! The bulls were out in full force last week, as risk sentiment boosted the Australian dollar up the charts. After testing the 1.0400 handle early last week, AUD/USD rose all the way up to nearly test 1.0800. The pair eventually closed 1.0782, marking a 300 pip advance up the charts!

Can the Aussie continue to climb up the charts?

Unfortunately, it looks like its started the week off on the wrong foot. The pair is currently down more than 50 pips from its opening price, as poor building approvals and retail sales data were just released.

Building approvals dropped a solid 7.9% in May, way worse than the expected 0.5% decline. This report is a leading indicator of future activity in the construction industry, as contractors need approval before beginning a project. Meanwhile, retail sales took a hit, falling 0.6% last May. It was projected that sales would actually rise by 0.3%.

Looking at our economic calendar, we’ve got a couple of red flags coming out tomorrow.

Tomorrow, trade balance data will be available at 1:30 am GMT. Word is that the surplus grew from 1.60 billion AUD to 1.91 billion AUD. It’ll be interesting to see whether the strong appreciation of the Aussie has had a negative impact on trade.

Later on at 4:30 am GMT, the Reserve Bank of Australia will be releasing its interest rate decision. The central bank isn’t expected to raise rates any time soon, so this may turn out to be a nonevent, but do watch out for the accompanying rhetoric. A slip of the tongue here or there could cause a major move in Aussie pairs.

Geronimo!!! After opening at what would be its intraday high at 1.0785, the Aussie tumbled all the way down to 1.0712 where it bottomed against the dollar. Good thing the comdoll was able to somehow pare its losses when it ended the day at 1.0732.

Given the roster of disappointing reports from the Land Down Under, I have to say I’m not so surprised that the Aussie headed down under the charts. Ha!

As I mentioned yesterday, building approvals for May declined by 7.9% and disappointed the 0.5% decline that markets were bracing for. Meanwhile, not only did the retail sales report disappoint the 0.3% forecast, but the -0.6% reading for May translated to the biggest drop in consumer spending in seven months!

And the disappointment didn’t end there!

Earlier today we saw that the AIG services index for June came in lower at 48.5 than its 49.9 reading for April, indicating further contraction in the services sector.

On the brighter side of things though, the trade balance report for May showed that exports outpaced imports by 2.33 billion AUD and topped the 1.91 billion AUD trade surplus that analysts predicted.

Later today we’ll have the RBA interest rate decision and statement at 4:30 am GMT. Don’t miss the chance to make some pips! If you still don’t know what to expect, make sure you give Forex Gump’s article a read!

What’s up mates? Well, the Aussie sure isn’t after losing 40 pips to the dollar in yesterday’s trading. AUD/USD peaked at 1.0748 before tumbling to its closing price of 1.0692.

Aside from the RBA’s concerns about economic growth, worries about a selective default for Greece and talks about another interest rate hike from China also weighed down the comdoll. RBA Governor Glenn Stevens mentioned yesterday that economic growth for 2011 may not be as strong as the bank earlier predicted. Yikes!

We don’t have anything on tap for the Aussie on our forex calendar today so keep tabs on market sentiment, ayt? Remember that the currency usually rallies when risk appetite picks up.

Yes, the Aussie lost out once again, but it was nothing compared to what happened earlier in the week. After trading as low as 1.0655, AUD/USD managed to withstand the wave of risk aversion that hit the market to close at 1.0686, just 6 pips lower for the day.

Earlier today during the Tokyo session, Australian employment data was released. The data showed that 23,400 jobs were added to the economy, which was way higher than the expected 15,200 figure. That makes it two months in a row now that more jobs were added to the economy, a first for 2011. If this is the start of a new trend, it could give the RBA more reason to raise rates sooner rather than later.

No other news on the docket for today, but be aware that we’ve got interest rate decisions by the ECB and BOE later during the London session. Stay on your toes and be careful out there my forex friends!