Daily Economic Commentary: Australia

Thank you, RBA! Because of the central bank’s more-optimistic-than-expected meeting minutes, the Aussie was able to chalk up another victory against the Greenback. Traders took AUD/USD from its opening price of 1.0251 to 1.0311.

As it turns out, the markets were a bit too harsh with their expectations for the RBA meeting minutes. According to the RBA, the economy actually had performed better than it previously estimated! Also noteworthy is how policymakers said that recent CPI data seems to be indicating that inflationary pressures have tempered.

Overall, the recovery is expected to continue at a moderate pace, but the RBA acknowledged threats to the economy stemming from the euro zone debt crisis.

In other news, the MI leading index just came out, and it upgraded its reading from 0.5% to 0.8% in May. It didn’t really have a big impact on the charts, but it just goes to show that the RBA may be on to something in saying that the economy is still on track.

For the rest of the day, since Australia won’t be publishing any more reports, it’s best you keep tabs on risk sentiment. Another broad-based risk rally could send the Aussie higher!

Four in a row baby! Thanks to risk appetite in markets and a slightly better-than-expected Australian data, AUD/USD was able to extend its winning streak by bagging another 52 pips. Booyah!

The MI leading index might have energized the Aussie bulls when it came in at 0.8% in May, its fastest pace since September last year.

Of course, Big Ben might have also factored into the price action. In his second testimony yesterday, he repeated the Fed’s plans of considering other non-QE options to stimulate the economy. Price action basically mirrored yesterday’s trading as it pushed commodity-related currencies higher in the charts.

Early today we saw the NAB business confidence data slide from -1 to -2 in the second quarter as investors worried about the euro zone’s debt crisis and the introduction of new taxes in the Land Down Under. Too bad the RBA’s interest rate cuts didn’t help much in boosting confidence!

No other report is scheduled for release today, so watch out for other events that might affect gold or comdoll trading!

And the rally continues! The Aussie extended its streak to five straight wins against the Greenback as AUD/USD rose to 1.0428 to lock in a 64-pip gain. Can the high-yielding currency make it six in a row today?

If so, it’ll have to do it without the help of major economic reports because the only release on tap today is the quarterly import prices report, which just came out. According to Q2 2012 stats, import prices rose 2.4% quarter-on-quarter, which is more than the 1.6% uptick that had been predicted. However, this doesn’t seem to have affected sentiment for the Aussie much so far.

For the rest of the day, risk sentiment will probably be the main driving force behind the AUD/USD since neither Australia nor the U.S. are scheduled to roll out any more reports. Remember, risk appetite is the Aussie’s friend!

[I]Stop right there, thank you very much…[/I]Whoa, whoa, whoa. Apologies for the odd choice of music, Happy Pip’s been messin’ around with my sound system again! In any case, the Spice Girls song is actually pretty descriptive of the Aussie’s trading last Friday, which dropped 50 pips to close at 1.0378, ending its 5-day winning streak.

Earlier today, the producer price index hit the airwaves and actually came in stronger than expected, printing a 0.5% increase, after it was projected that prices would rise by 0.3%. Remember, producers normally pass on any price increases in raw materials to consumers.

Raw materials have been increasing for 11 months straight now, which could indicate that inflation is revving up. While this hasn’t stopped the Reserve Bank of Australia from cutting rates, if inflation starts to really show signs of heating up, could cause policymakers to think twice before hitting the Land Down Under with another rate cut.

Not even stronger than expected inflation data was able to keep the Aussie afloat against the Greenback and the yen yesterday as risk aversion dominated price action. AUD/USD slipped by nearly a hundred pips as it closed at 1.0278 while AUD/JPY ended the day at 80.57.

Producer prices in Australia chalked up a 0.5% uptick for the second quarter of the year, higher than the estimated 0.3% increase and the previous quarter’s 0.3% drop. On an annual basis, this translates to a 1.1% increase in producer prices, which could have a positive impact on consumer inflation.

However, debt concerns in the euro zone stole the spotlight once more as another Spanish city was rumored to need financial help from the government.

There are a couple red flags from Australia during today’s Asian session so huddle up! First, China is set to release its HSBC flash manufacturing PMI at 2:30 am GMT and possibly show an improvement from its previous 48.2 reading. Otherwise, another drop in the Chinese PMI could force the Aussie to resume its drop as weaker manufacturing in Australia’s number one trading buddy could be negative for the Land Down Under as well.

Another event to watch out for is RBA Governor Stevens’ speech at 3:00 am GMT. As head of the Australian central bank, he’d have a lot to say about the RBA’s future monetary policy decisions. Bear in mind that hawkish remarks could keep Aussie pairs afloat while dovish comments could spur another selloff. Stay tuned!

And the slump continues! After a brief pause earlier in the day, the Aussie came crashing lower during the New York session as the sell-off continued. AUD/USD closed 27 pips lower to finish at 1.0252.

Earlier today, CPI figures were released and showed that quarterly inflation stood at 0.5%, which is lower than the projected 0.6% figure, but slightly higher than the previous quarter’s number of 0.1%

You might be thinking, “[I]Well, inflation remains low… isn’t that a good thing[/I]?”

It isn’t if you’re the Australian dollar! This just means that the RBA still has more room to cut rates further if it really wants to boost the economy. This of course, doesn’t bode well for the local currency.

Nothing due for the rest of the week, so most likely the Aussie will surf to the beat of risk sentiment over the next couple of days.

The Aussie cruised up the charts as risk appetite picked up in yesterday’s trading. It ended the day 61 pips higher against the dollar at 1.0312. Meanwhile, against the yen, it scored a 47-pip win against the yen as it finished the day at 80.62.

Comments from ECB officials helped cheer up investors and gave them enough reason to seek higher-yielding assets in yesterday’s trading. With that said and given that our forex calendar is still blank for reports from Australia today, make sure you gauge market sentiment, ayt?

Keep in mind that the comdoll usually rallies when risk appetite is up and it doesn’t do so well when risk aversion is in play. Good luck!

Back to back, homies! The Aussie registered its second straight win against the Greenback as risk appetite continued to push it higher up the charts. AUD/USD began the day at 1.0313, climbed straight to 1.0399 and never looked back.

The Aussie had no choice but to surf the waves of risk sentiment yesterday, as the economic calendar was blank for Australia. Fortunately, risk appetite was up, and the markets took the comdoll higher.

Today, it looks like we may get more of the same since there’s nothing on tap for Australia. In the meantime, keep doing what you’re doing - monitoring risk sentiment! It seems to be the major market driver for the Aussie as of late and will probably dictate price action on AUD/USD going into the weekend.

Despite the lack of economic reports, the Aussie rallied to its 2-month highs against the dollar, like a sir! Before it finished Friday’s trading with a 74-pip gain at 1.0473, it peaked at 1.0487.

It turns out there were enough good vibes to go around the forex hood on Friday following the remarks of some EU leaders to ensure the euro’s survival. Also, the better-than-expected U.S. GDP report might have helped higher-yielding currencies rally.

Earlier today, it was reported that new home sales in Australia grew four times faster by 2.8% in June from May. That should be good news for the comdoll, but given that it’t not a top-tier report, I’m not sure if it would be enough to boost the Aussie in today’s trading.

I think that currencies will still be primarily dictated by market sentiment. So make sure you gauge the market’s mood before pulling the trigger on any trade. Peace out, peeps!

When there’s a will, there’s a way! Even though other major currencies sold-off versus the dollar, the Aussie remained resilient and actually posted some gains. AUD/USD marked its fourth straight day of gains as it closed the U.S. trading session 26 pips higher from its opening price.

AUD/USD shrugged off risk aversion and sprinted higher due to the somewhat positive housing data. The HIA New Home Sales showed a 2.8% growth while the Building Approvals report came in with a -2.5% decline only (the market had initially expected a -14.6% decrease).

No major news report left on the docket so we could see the Aussie maintain its overall uptrend. It’s currently trading above 1.0500, a level it hasn’t visited since March 27. Let’s see how whether the bulls will be able to continue pushing the currency higher!

Once again, the Aussie climbed to a new high at 1.0539, but finally settled at 1.0509, up just 8 pips on the day. With a shooting star forming on the daily chart, could this be the beginning of the end for the Aussie’s bullish run?

Nothing headed our way from Australia once again, but take note that Chinese manufacturing PMI figures are set for release today. The index is expected to improve slightly from 50.2 to 50.4. Because of the two country’s strong trade relationship, if the report comes in much better than anticipated, it could prompt another Aussie rally today.

It looks like the bulls have finally run out of steam. After AUD/USD had tapped a new 5-month high on Tuesday, the pair sold-off yesterday. It rose as high as 1.0543 only to find itself sitting at 1.0457 at the end of the U.S. trading session.

According to news reports, the FOMC statement was the reason behind the sell-off. The FOMC statement did not show any hint of QE3, causing traders to price out their easing expectations.

In other news, earlier today, Australia’s retail sales report and trade balance greatly exceeded expectations. Retail sales showed a stellar 1.0% growth, much higher than the 0.6% rise initially predicted. Meanwhile, the country’s trade balance showed a 10 million AUD surplus, opposite the 360 million AUD deficit forecast.

No important events left on deck for Australia but given the strong data just released, we could see the Aussie resume its uptrend. Be very careful of sentiment shifts though, as both the BOE and the ECB are scheduled to release their respective interest rate decisions later today.

Ooomph! After it tried breaking above 1.0550, AUD/USD got rejected fast and capped the day near its 1.0456 open price. Was it all thanks to Draghi, then?

I don’t think so. The pair started climbing during the Asian session thanks to the positive trade balance and retail sales reports that we saw yesterday.

But the Aussie bears were just too hungry for pips! ECB’s Draghi’s speech served as a catalyst for a selloff in high-yielding currencies like the Aussie.

No data is scheduled for release in the Land Down Under today, but keep an eye out for any major report that could affect risk sentiment! I hear that the NFP report at 12:30 pm GMT usually inspires crazy volatility.

Cowabunga! The Aussie continued its cruise up the charts as it extended its gains against the dollar on Friday. After opening the day at 1.0456, AUD/USD finished the week at 1.0559.

There weren’t any economic reports from Australia. However, positive vibes were aplenty on Friday thanks to thebetter-than-expected NFP figure which sparked risk buying.

Today, we don’t have any top tier data from the Land Down Under. But brace yourselves, folks! Early morning tomorrow, at 5:30 am GMT, the RBA will take the spotlight and announce its rate decision. The general consensus is for the central bank to keep rates steady. However, according to Forex Gump, it would be worth your while to keep an ear out for the RBA’s statement just in case the bank drops hints on future monetary policy decisions.

If central bankers in the Land Down Under sound more hawkish, we could see the AUD rally. However, if they sound more dovish, the comdoll could trade lower.

There’s no stopping this superstar! While the other high-yielding currencies levelled off against the Greenback, AUD/USD had risen to a new four-month high near 1.0600 before it capped the day with a 9-pip gain. What the heck is happening in the Land Down Under anyway?

Australia’s MI inflation gauge and its ANZ job ads data might have contributed to the Aussie bulls’ party. The inflation report showed a 0.2% growth in July after slipping by 0.2% in June, which lessens the possibility of another RBA rate cut. Meanwhile, the job ads data came in at -0.8% in July, which is a better reading than the 1.1% downtick that we saw in June.

In a couple of hours the RBA will take center stage as it announces its interest rate decision. Market bees are buzzing that the central bank will keep its rates steady at 3.50%. Apparently, RBA’s Stevens’ speech about Australia being a “Lucky Country” implied that the central bank is adopting a wait-and-see mode this month.

Will the RBA provide fireworks in the comdolls’ price action? Stay tuned at 4:30 am GMT as the central bank announces its decision!

An upbeat RBA statement gave Aussie pairs a strong boost during the Asian session but these gains were gradually erased as the day dragged along. AUD/USD hit a high of 1.0604 before closing at 1.0548 while AUD/JPY closed 6 pips below the 83.00 handle.

The RBA left rates unchanged at 3.50% as expected during their monetary policy statement and pointed out that economic growth was in line with their estimates. RBA Governor Glenn Stevens also noted that external risks are less serious than before, hinting that there might be no need to adjust monetary policy later on.

Only the home loans report is on the Land Down Under’s schedule today and the actual data fell short of expectations. Home loans climbed by only 1.3% in June, less than the consensus of a 2.1% rise, but the May figure was revised up from -1.2% to -0.9%.

Due to some very good data, AUD/USD has managed to find solid support in the last 24-hours. The pair is currently trading around 1.0590, 40 pips higher from where it was during the previous Asian trading session.

Australia’s employment report showed that the number of people employed has risen by 14,000, almost one and a half times the market had initially expected. In addition, the jobless rate was reported to have fallen to 5.2% from 5.3%.

No economic data left on Australia’s economic cupboard today, but we will see the complete details of the RBA Monetary Policy early tomorrow at 1:30 am GMT. We all know that the central bank has kept rates unchanged, but it’ll be interesting to see why the bank chose to do what it did. Stay tuned for that.

Uh oh, it looks like someone is running out of steam… After the pair’s impressive rally in the last couple of weeks, it seems that AUD/USD has decided to take a break. Save for the small spike up during the Asian session due to the positive employment report, the pair generally moved sideways yesterday with resistance around the 1.0600 major psychological barrier and support just a few pips above 1.0550.

As I mentioned yesterday, the country’s employment report came in significantly better than expected. The number of people employed was reported to have jumped by 14,000 and the unemployment rate fell to 5.2% from 5.3%.

Australia doesn’t have any big reports scheduled today but watch out for any external events that could cause a sentiment shift. At 12:30 pm GMT for instance, Canada will be publish its employment report. If it comes in better than expected, the Aussie could be indirectly affect and rally.

It took a painful beating in the first half of the day, but the Aussie staged a marvelous comeback in the New York session to erase most of its losses. After trading as low as 1.0497, AUD/USD closed at 1.0575, just 4 pips below its opening price.

All eyes were on the RBA monetary policy minutes at the start of the day, which saw the RBA upgrade its growth forecast for 2012 from 3.0% to 3.5%.

But the minutes also highlighted risks to the economy, such as those stemming from the European debt crisis and rising commodity prices. And more importantly, it revealed that has become uncomfortable with the levels at which the Aussie has been trading.

To make matters worse, weaker-than-expected trade balance data from China (which happens to be Australia’s largest trading partner) pulled down the comdolls early in the day. But the Aussie’s strength prevailed and it was able to stage a solid rally as risk sentiment improved.

Looking ahead, we don’t have any tier 1 reports on the economic docket this week. That being the case, I wouldn’t be surprised to see the Aussie just continue dancing to the beat of risk sentiment this week.

Ooomph! After stalling near the 1.0600 area last week, AUD/USD finally gave in and dropped by 47 pips to 1.0513. What the heck happened in the Land Down Under?

There were no economic reports released from Australia yesterday, but the Aussie bulls ended up taking profits after uncertainty in the euro zone dominated the price action of high-yielding currencies. Word on the hood is that the approval of the ESM would be delayed, which could limit the ECB’s options in intervening in the bonds market.

Will the reports released today help the Aussie gain back some pips on the Greenback? The NAB business confidence data released a couple of minutes ago came in at a reading of 4, which is a lot better than the -3 reading that we saw last month. Meanwhile, the new motor vehicle sales clocked in at -0.8% in July, which is a bit better than the -1.0% slip that we saw in June.

No other reports are scheduled for release in Australia today, so pay attention to news reports from the other major economies! Who knows, there might be a game changer there somewhere!