Daily Economic Commentary: Australia

For the third day in a row, the Aussie posted a loss against the Greenback as AUD/USD fell 21 pips to 1.0492. Uh oh… Is this a start of a new trend?

As I had mentioned yesterday, Australia posted an improvement in the NAB business confidence report early in the day, but this didn’t keep sellers from dumping the Aussie later in the day! Like its fellow comdolls, the Aussie weakened against the dollar at the sight of upbeat U.S. data… just like Superman to kryptonite!

So far, the Aussie hasn’t made any moves to undo its losses yesterday as it’s off to a slow start today. The downturn in the Westpac consumer sentiment report, which showed a 2.5% decline (versus the previous month’s 3.7% uptick), might have had a hand in bogging down demand for the Aussie.

In a few minutes, the wage price index will be published, and forecasts have it showing a 0.8% increase in wages in June, down from 0.9% in May. If the report disappoints, it could mean just set the tone for the day and lead to more losses for the Aussie.

Finally! A green candle! After three consecutive days of losses, the Aussie was able to buckle a poor start and eventually ended the day with a 9-pip win to close at 1.0504. Will AUD/USD now resume its uptrend?

Earlier this morning, the MI inflation expectations report was released. Apparently, consumers expect price to rise by just 2.4% over the next year, down from the 3.3% pace in June.

With inflation expectations tapering down, this gives the RBA more leeway to cut rates down the road. Take note that baseline rates now stand at 3.50%, but rates fell as low as 3.00% during the height of the recession in 2009.

No other biggies on tap for today, so we may not see any huge moves in the market. In any case, always stay on your toes and read up on my other commentaries for potential market movers!

Woah! Surf’s up, dudes! The Aussie enjoyed a fresh wave of risk appetite as it cruised higher against the Greenback and the Japanese yen in yesterday’s trading. AUD/USD bounced back above the 1.0500 handle while AUD/JPY closed at 83.39.

Despite the drop in MI inflation expectations and weak data from China, the Australian dollar was able to enjoy gains against its counterparts yesterday. MI inflation expectations dropped from 3.3% to 2.4% in July while Chinese foreign direct investment slumped by 3.6%, setting off a slight Aussie selloff during the Asian session.

However, positive developments from the euro zone, namely the drop in Spanish 10-year bond yields and Merkel’s promise to protect the euro, boosted risk appetite during the London and New York sessions. Mixed U.S. data also dampened demand for the U.S. dollar, allowing AUD/USD to carry on with its rally.

There are no reports due from the Land Down Under today which means that risk sentiment could drive AUD/USD for the rest of the day. Stay on your toes!

AUD/USD bulls were in a world of hurt last Friday due to the mildly positive data from the U.S. The University of Michigan consumer sentiment survey came in better than expected, which resulted in AUD/USD selling off. The pair ended the New York trading session at 1.0423, 93 pips lower from where it was from the beginning of the Asian trading session.

Australia didn’t release any economic reports last Friday. This week, the only potential market-mover is the Reserve Bank of Australia (RBA)’s meeting minutes. It’ll publish tomorrow at 1:30 am GMT. It’s important to keep an eye out for because it provides us with in-depth insights into the economic conditions that influenced the central bank’s decision on where to set interest rates.

Quiet day of trading for the Aussie, as it was stuck in consolidation mode. AUD/USD traded within a range of just over 50 pips and eventually closed at 1.0452, up 30 pips from its opening price.

Any minute now, the Reserve Bank of Australia will be releasing its latest meeting minutes. Were our mates from the Land Down Under more hawkish or dovish with regards to monetary policy? I’ll give you guys the 411 tomorrow on what was said about the state of the Australian economy. Hang tight!

The RBA meeting minutes gave the Aussie a huge boost at the start of the day, but a good chunk of its gains were eventually undone in the New York session. From an intraday high of 1.0521, AUD/USD retreated to 1.0475, up 24 pips on the day.

What sent the Aussie higher wasn’t so much what the RBA minutes said… rather, it was what it DIDN’T say that allowed the currency to rally. Unlike its previous meeting minutes, the RBA didn’t bring up the topic of a possible currency intervention, which gave traders the confidence to buy up the Aussie.

Overall, the RBA sounded chipper, saying it wasn’t bothered by the recent soft reports that China has been rolling out. It also said that consumer spending is maintaining its momentum from Q2, and that the employment situation is an effect of strong growth in the resource sector.

In other news, the MI leading index printed a reading of 0.5% for the month of June, which is a decent followup to the 0.9% reading in May. But is this enough to revive demand for the Aussie today? Perhaps! But from the looks of it, Aussie bulls will need a boost from risk appetite if they want AUD/USD to revisit yesterday’s highs.

Just when everyone thought the Aussie was going to end the day in the bear lair, the comdoll pulled off a massive comeback! AUD/USD traded all the way down to 1.0414 after opening at 1.0475. Then, Aussie bulls stepped up their game and rallied to close the day at 1.0502.

There weren’t any economic data released from Australia but we did have the much-anticipated FOMC minutes on tap. Luckily for the Aussie (and all the other major currencies), the minutes revealed that the Fed is actually more eager to pull the trigger on further stimulus than previously anticipated.

Our forex calendar is once again blank for reports from the Land Down Under today. We do have a few reports from the U.S. though. So make sure you keep an ear out for them as they may continue to dictate price action in today’s trading!

After three consecutive victorious days, the Aussie finally ended yesterday with a loss. AUD/USD closed the U.S. trading session at 1.0439, 62 pips lower than its opening price that day.

AUD/USD was pressured lower yesterday because of the very disappointing Chinese data. The HSBC Manufacturing PMI came in at 47.8, significantly lower than the previous month’s 49.3 reading. Moreover, China’s leading index, even though it showed a 0.7% rise for July, for June was revised down to 0.0% from 0.1%.

Australia’s forex calendar is clear as the bright blue sky today as no major report is scheduled for release. This means that the Aussie’s price action will most likely be determined by events happening in other major economies like the U.S. and the euro zone.

Despite an upbeat speech from the RBA head honcho, the Aussie still scored its second straight loss to the dollar on Friday. AUD/USD closed the day at 1.0406 after starting the day at 1.0439.

RBA Governor Glenn Stevens might have surprised a few market junkies on Friday when he said that the central bank expects the domestic economy to pick up and counter the slowdown in the global economy. But unfortunately for the comdoll, it looks like the Aussie bulls already ran out of fuel.

Although most market junkies say that the dollar’s win on Friday was nothing more than just profit-taking, you should still be on your toes. Word around the hood is that AUD/USD spiked down earlier in today’s trading on rumors that the PBOC set a weak price for USD/CNY.

Our forex calendar doesn’t have any data on tap from Australia today, so be sure you’re on your toes for reports that could affect market sentiment. Keep in mind that the Aussie usually does well when risk appetite is up. Good luck!

Strike three! For the third straight day, the Aussie suffered the wrath of the Greenback bulls. AUD/USD was sold-off yesterday, falling to 1.0370 after it had opened the Asian session at 1.0416.

There was no single catalyst for the sell-off so I suspect the move was simply renewed profit taking from the Aussie’s recent climb. If you look at the currency’s daily chart, you’ll see that the general trend is still up. It has only been in the last couple of days that the pair has fallen.

Whether the move down will continue or not will depend on events happening externally as Australia’s economic calendar doesn’t have anything on it. Look at data from the U.S. and euro zone bailout news to determine the Aussie’s direction today.

Phew, that was a close one! The Aussie took a hit from the Greenback early in the day, but AUD/USD was able to finish the day up 36 pips from its intraday low. How did the Aussie bulls do it?

It seems that the Aussie bulls have risk appetite to thank. Though the Land Down Under printed a worse-than-expected quarterly construction data yesterday, the optimism in the later trading sessions was able to pull AUD/USD above its lows.

As it turned out, traders are feeling optimistic that the Fed will announce a QE3 program this weekend thanks to ECB’s Draghi cancelling out his trip to Jackson Hole. Not only that, but word on the street is that the SNB is also sticking to its home base over the weekend!

Aside from QE3 speculations, market bees also buzzed about how Draghi’s absence in this weekend’s meeting meant that the ECB is working really hard to come up with something that would help the sky-high bond yields in the euro zone.

Today Australia will release its building approvals report and private capital expenditure at 1:30 am GMT. Both releases are expected to print lower than their previous figures, but keep an eye out for any surprises!

Just when you thought the Aussie was about to ride the waves up the charts after its win on Tuesday, it wipes out! AUD/USDended the day lower yesterday at 1.0356 after starting the day at 1.0380.

What caused the Aussie’s demise?

For one, there was the worse-than-expected construction data from Australia which showed that construction work done in Q2 2012 contracted by 0.2% and fell short of the 0.5% growth forecast. Also, there were talks that the commodity boom could already be over. Of course, that gave investors one more reason to sell the Aussie especially since Australia is a major commodity-producing economy.

Oh, and what’s this! Building approvals for July just came out and the report showed that approvals contracted by 17.3%, much more than the 4.8% contraction that analysts had predicted. Uh oh.

On the positive side of things though, private capital expenditure for Q2 2012 topped expectations when it came in at 3.4% versus the 2.7% forecast.

The Aussie dropped following the release of the mixed figures, but whether or not the reaction would continue, I think we’d have to stay tuned to market sentiment to find out.

Say hello to one of yesterday’s biggest losers… the Aussie! It lost 59 pips against the Greenback as AUD/USD slid from its opening price of 1.0356 to end the day below the 1.0300 handle.

Surprisingly enough, it wasn’t Australia’s heavy releases early in the morning that determined AUD/USD price action… rather, it was overall risk sentiment!

The markets barely reacted to the building approvals report, which was a huuuge disappointment. It showed a 17.3% decrease in approvals, far worse than the 4.8% decline that many had expected.

Even the quarterly private capital expenditure report failed to trigger a notable reaction from the market as expenditures rose by 3.4% instead of just 2.7%.

Right now, it seems that the markets are focused on the possibility that Ben Bernanke’s speech at the Jackson Hole Symposium will be a letdown. If this proves to be true, we could see the Aussie extend its losses later on!

Thanks to Bernanke’s disappointing Jackson Hole speech, AUD/USD was able to benefit from U.S. dollar weakness as it closed at 1.0331 last Friday, 35 pips from its day open price. AUD/JPY, on the other hand, suffered a loss as it ended the day 12 pips below the 81.00 handle.

Although most market watchers were expecting Bernanke to make a huge announcement during his Jackson Hole speech, the Fed head burst everyone’s bubbles as he simply pointed out the weaknesses in the U.S. economy but stopped short of talking about QE3. Despite that, the Greenback still lost ground to the higher-yielding Aussie as traders believed that further easing is likely to happen sooner or later.

However, the Aussie started the week on a poor note as China printed weaker than expected manufacturing PMI over the weekend. The figure for August slipped from 50.1 to 49.2, indicating that the manufacturing sector contracted for the month. Note that China’s manufacturing PMI hasn’t slipped below the 50.0 mark since November last year and that this is bad news for Australia, China’s number one trade partner.

It didn’t help that Australia just printed weaker than expected retail sales for July, as the report showed a 0.8% decline instead of the projected 0.3% uptick. The good news is that the previous reading was revised up from 1.0% to show a 1.2% increase for June.

Tomorrow could be a more exciting day for the Aussie as the RBA is set to make its monetary policy announcement at 4:30 am GMT. Then, on Wednesday, Australia is set to release its GDP figure for the second quarter of this year. Thursday has the Australian jobs data on tap while Friday has the trade balance on its schedule, so expect additional volatility for the Aussie for the entire week!

What a terrible day it was for AUD/USD yesterday. Not only did the pair start the week with a huge 51-pip gap down, but it was also weighed down heavily by the poor results of the retail sales report. AUD/USD closed the U.S. trading session at 1.0250, 32 pips lower from its opening price.

Instead of printing a 0.3% increase like initially projected, the retail sales report showed that sales declined by a whopping 0.8%. In addition, the report on company operation profits took a major hit and fell 0.7%. The forecast was for profits to rise by 1.1%.

Today will be an important day for AUD/USD as the Reserve Bank of Australia (RBA) is scheduled to announce its decision on interest rates at 4:30 am GMT.

The market widely expects the central bank to keep rates unchanged at 3.50% but many analysts are predicting that the accompanying statement could hint at a rate cut in the near future. If the RBA says anything about a future rate cut, expect to see AUD/USD sell-off again.

Talk about going down under! The Aussie chalked up another losing day against the Greenback and the yen as AUD/USD closed at 1.0224 while AUD/JPY ended the day at 80.10. What caused the Aussie selloff yesterday?

The only major event on Australia’s schedule yesterday was the RBA monetary policy announcement, which turned out to be neither a dovish nor a hawkish one. Central bankers stated that their current monetary policy is appropriate for now and that they probably might not make any changes any time soon. RBA Governor Stevens also reiterated that growth remains sluggish and that there are still several uncertainties present.

Today, the Land Down Under just released its Q2 2012 GDP figure, which came in at 0.6%. Although this was weaker than the consensus of 0.8% growth, the good news is that the previous quarter’s figure was revised up from 1.3% to 1.4%.

No other reports are due from Australia for the rest of the day so make sure you keep close tabs on risk sentiment to figure out where the Aussie could be headed!

Three in a row ain’t so good when it’s losses were talking about! For the third straight day, AUD/USD slid lower as the Aussie was one of yesterday’s weakest performers. The pair started to fall after Australia had missed its GDP forecasts, and in the end, price closed 38 pips below its opening price at 1.0186.

The Australian economy might’ve grown 0.6% last quarter (not bad considering other economies contracted in Q2), but it wasn’t enough to satisfy the market’s expectations. Forecasts saw growth coming in at 0.8% to follow up the 1.4% surge in Q1.

Now, even though this marks the fifth straight quarter of economic expansion, market players saw the glass half-empty as consumer spending appears to be weakening. Apparently, it only rose by 0.3% last quarter and was one of the main reasons why GDP missed forecasts.

But today, it seems like the markets are ready to look on the bright side as the Aussie is already off to a strong start. With help from a surprise drop in the unemployment rate (from 5.2% to 5.1%), buyers have been lifting AUD/USD. The bad news is that despite the decline in the unemployment rate, Australia witnessed job losses of 8,800 last month, instead of gains of 5,100 as most had predicted. In any case, it seems the markets are more focused on the silver lining for now. But be careful… the tides may turn in favor of sellers later on. After all, we have the ECB rate decision and a few heavy U.S. reports due later in the day that may shift risk sentiment.

Not this time, Aussie bears! After dropping for three days in a row, the Aussie bears finally took a breather and let the bulls take over. AUD/USD tipped an intraday high at 1.0300 before it capped the day 97 pips higher than its open price. Booyah!

It might have helped the Aussie that traders mostly shrugged off the mixed employment numbers from the Land Down Under. The pair traded on a tight range after rising during the Asian session, and even continued its upside move during the U.S. session after Super Mario announced his OMT plans. And if that wasn’t enough, the U.S. economic data also printed to the upside, which hinted of a strong reading for today’s NFP report!

Let’s see if the downside surprise in Australia’s trade balance report will weigh on the comdoll today. A couple of minutes earlier Australia clocked in a trade deficit of 556 million AUD in July, which is a lot weaker than June’s 9 million AUD surplus in June and the expected 300 million AUD deficit in July.

No other report is scheduled for release in Australia today, so pay attention to possible inflection levels for the Aussie pairs!

Simply amazing! The Aussie was able to undo over a week’s worth of losses in two days! AUD/USD posted its biggest rally in two months as it rose 104 pips to greet the weekend at 1.0397.

The most awesome thing about last Friday’s move was that the Aussie didn’t even need help from Australian data… the disappointing U.S. NFP report was all it needed!

With the ugly NFP figures boosting the case for QE3, traders once again favored higher-yielding assets such as the Aussie. But will this be enough to fuel the rally for another week?

Well, if the Aussie wants to return to keep rising, we’ll probably need to see positive results from this week’s reports. So far, it isn’t off to a good start.

Home loans data just came out and it showed a 1.0% decline instead of a 0.1% uptick. But this report doesn’t seem to be getting much attention from the markets yet.

Maybe the other tier 2 reports due later this week will have better luck. Tomorrow, we have the NAB Business Confidence index on tap at 1:30 am GMT. Then on Wednesday, we’ll take a look at the Westpac Consumer Sentiment at 12:30 am GMT. And finally on Thursday, MI Inflation Expectations data will be available at 1:00 am GMT.

But remember, until these reports come out, AUD/USD price action will probably be dictated by risk sentiment. Good luck out there, kiddos!

Just like other higher yielding currencies, the Australian dollar started the week off on the wrong foot. AUD/USD slipped 29 pips lower to finish at 1.0336. Will we see more of the same from the Aussie today?

Earlier today, the NAB business confidence index was released but unfortunately, it printed a reading of -2.

What does this mean homies? It means that our mates from the Land Down Under are a little less optimistic about the state of the Australian economy. Take note that the index has been fluctuating back and forth between improving and worsening conditions, so it’ll be interesting to see how this plays out going forward.

No biggies on the docket today, so we might see a little more consolidation on AUD/USD. Nevertheless, always stay on your toes as you never know what might hit the markets!