After its impressive two-week rally, the AUD paused to catch its breath last Friday as it ended lower against the USD. That day, the AUDUSD pair hit a new yearly high of 0.9271 before taking a sharp dive and reaching an intraday low of 0.9124.
Would the AUD resume its rally this week? Only a few economic reports are scheduled to be released but the RBA’s monetary policy meeting minutes due on Tuesday could set the tone for AUD trading for the rest of the week. The minutes of the meeting could highlight the strong performance of and the bullish outlook for the Australian economy and could also hint at another interest rate hike in their next rate statement.
Today, RBA Assistant Governor Philip Lowe is scheduled to deliver a speech entitled “The Growth of Asia and Its Implications on Australia” at the Citigroup Australian Investment Conference. A positive outlook for the Asian region translates to an upbeat sentiment for Australia, which would pump up the AUD.
Later this week, the Melbourne Institute will be releasing its leading index of indicators. The index rose by 1.1% last month and is expected to continue its uptrend, given the latest set of strong economic data. Data on import prices, which is expected to print another decline, is also due this week.
Economic reports from China should also have an impact on AUD trading, since China has a major influence on the Australian economy. Chinese GDP, which is expected to rise by 9.0% for the third quarter, is due Thursday 2:00 am GMT. China’s industrial production reading is also due then. After rising by an impressive 12.3% last August, industrial production in this Asian giant is projected to surge by 13.3% in September.
The Aussie continued its streak against the greenback and the yen as it managed to register new yearly highs yet again. The AUDUSD reached 0.9286 before closing at 0.9279. Similarly, the AUDJPY pair rose to a high of 84.17 before closing at 84.06.
Yesterday, RBA Assistant Governor Dr. Philip Lowe issued a speech titled “The Growth of Asia and Some Implications for Australia” at the Citigroup Australian Investment Conference, in Sydney. In his speech, he mentioned that Australia would benefit from rising demand for raw materials like iron ore and coal from the Asian economies. Note that China’s third quarter GDP and y/y industrial production, which are going to be released on October 21, are seen to post some notable growth. China is one of the biggest economies in the world. Hence, any growth in any of the two mentioned accounts could indicate growing demand for Australia’s export products. Such could then keep the AUD higher against the dollar.
Earlier today, the RBA had its MPC meeting minutes. Remember that the central bank hiked its interest rate from 3.00% to 3.25%. In its minutes, the bank reasoned that keeping the rate could speed up future inflation and cause economic “imbalances.” Hence, a raise in borrowing costs is warranted given also that current inflation is already above the bank’s target.
No other economic reports are due today in Australia. In the mean time, Yahoo is scheduled to publish its third quarter earnings report during the US session. Encouraging profits could once again spark risk appetite which could benefit the higher yielding assets such as the AUD.
The Aussie, just like the other comdolls, fell against the dollar when risk aversion hit the markets yesterday. Apparently, the gloomy data from that came out of the US overshadowed better-than-expected earnings from top companies like Texas Instruments and Apple.
Australia’s leading index just released rose once again by 1.1% in August. The index, which is designed to determine where Australia’s economy is headed, didn’t have much impact though as most of the data used to come up with the final result have been previously released.
No economic data today but expect to see Australia’s report on import prices for the third quarter of 2009 on Friday.
The AUDUSD lost some cool yesterday after setting a new yearly high at 0.9328. The decline in risk appetite during the latter part of the US session did not bode well for Aussie and the pair lost much of its gains to close at 0.9259.
No data from Australia is scheduled for release today, although Chinese GDP was being released as I was writing this. I’ll update you on whether that report caused a ruckus in the markets or not.
Tomorrow, we’ve got the import prices report coming out at 12:30 am GMT.
With China, Australia’s major trade partner, posting an amazing 8.9% economic growth, you’d think that the AUD would shoot all the way up… Instead, the AUDUSD fell to 0.9200 and the AUDJPY dropped to 84.00 as traders focused on the fact that Chinese GDP failed to meet the consensus of 9.1% growth.
If you think that China’s 8.9% GDP growth is already impressive, you should check out their other economic indicators. Their industrial production was up by a whopping 13.9% from the previous year, beating the forecast of a 13.3% increase and the earlier month’s 12.3% rise. Fixed asset investment surged by 33.3%, which was roughly in line with the consensus of a 33.1% increase. Its CPI was down by 0.8% while PPI fell by 7.0% just as expected. Despite these upbeat reports, traders grew concerned about the sustainability of China’s growth when the hundred billions of dollars in government stimulus is withdrawn. The result? A drop in Asian equities and a sharp dive by both the AUD and NZD.
Fortunately, the AUDUSD was able to rebound during the US session as traders took the opportunity to go long when the pair dipped to the 0.9200 handle. It sprinted all the way to 0.9300 and closed at 0.9274.
Would the AUDUSD be able to hold on to its gains until the end of the week? Australia’s economic calendar is not as busy, with only data on import prices on tap. This report, which was just released a few moments ago, showed that import prices fell by 3.0% in the third quarter.
Keep an eye out for the release of US existing home sales at 2:00 pm GMT. If the actual data comes in better than the consensus of 5.37 million home sales, then we might see a run of risk appetite which would boost the AUDUSD. Also, earnings reports from several US companies such as Microsoft are due today. Watch out for sudden changes in sentiment!
The Aussie closed mixed against the two safe-haven currncies – the USD and the JPY. The AUD followed up on its uptrend over the yen as it went as high as 85.33 before closing at 84.91. It, however, closed negatively against the greenback. The AUDUSD pair fell to as low as 0.9200 before closing at 0.9222.
No major economic reports were publised in Australia last Friday. The positive results of the US existing home sales did not do much to influence risk appetite either. The capitals markets were buoyed by strong corporate earnings in the US for the most part of the week . Investors and traders probably booked their profits to close the week which caused an overall selling in the equities markets. This consequently brought down the high yielders in favor of the USD.
Austrlia’s PPI for the third quarter was just released earlier today. The country’s PPI, which is used to gauge inflation, rose to 0.1% from last period’s -0.8% reading. The latest score, however, is below the consensus of 0.3%. Despite this, the AUD still rallied against the JPY and the USD.
On October 28, Australia’s CPI for the third quarter will be reported as well. Inflation is seen to rise to 0.9% from 0.5%. The result, though, could come in below the initial projection given the latest PPI reading.
Lastly, Australia’s CB leading index in August will be published on October 29. The index is composed of of 7 economic indicators that take into account money supply, building approvals, corporate earnings, exports, inventories, and spreads on interest rates. The account is used to gauge the economy’s direction in the foreseeable future. With July’s tally already pegged at 0.7%, any further increase from the previous score could reflect positively on Australia’s economy and the AUD.
As usual, the AUD/USD pair took a queue from the drop in gold prices and gave back some of its gains from last week yesterday. The pair attempted to rally early during the Asian session but the move fizzled out and the pair eventually found itself back in the 0.9150 region. It seems that the next logical step for the AUD/USD bears is to take the pair to 0.9113, last week’s lowest price level.
The National Australia Bank’s business confidence survey for third quarter 2009 just released surged to 16 from -4 the previous quarter. This is the first positive number in six months, indicating that business conditions are improving and adding more evidence the Australia’s economy is indeed better placed than its western counterparts.
Australia’s economic cupboard will remain empty for the rest of the day but expect to see the country’s Consumer Price Index tomorrow at 12:30 am GMT. Economists predict that the average price of goods and services increased by 0.9% during the third quarter of 2009 as consumer spending picks up. If forecast holds or comes out higher than expected, it would mark the third consecutive quarter of price increases and could provide a reason for investors to buy up the AUD.
Indecisive movement for the Aussie, as risk aversion and risk appetite continued to duke it out. The AUDUSD pair closed the day at 0.9166, just 4 pips from its opening price.
Early today, the CPIq/q report was released. The report showed that consumer prices rose by 1.0% in the past quarter after it was expected that prices would rise by only 0.5%. Given that inflation is slowly picking up, it may give the Reserve Bank of Australia more reason to raise rates further next week. It is expected that the RBA will raise the rate by another 0.25% next week, bringing the rate up to 3.25%.
Tonight, look out for the CB leading index, which is scheduled for release at 11:00 pm GMT. While the report is not normally a high impact report, if it does come in to show a nice surprise, it may provide some support for the slumping Aussie.
Ouch! The AUDUSD crashed all the way down to a low of 0.8962 as weak economic reports from the US called for risk aversion. Although the AUD was able to benefit from a strong headline CPI, it was unable to hold on to its gains as it gave way to the safe-haven USD.
Consumer prices posted a 1% quarterly increase, which was higher than the consensus of a 0.9% uptick. However, the annualized CPI reading slowed to 1.3%, which is its slowest increase in almost 10 years. This gave rise to speculations that the RBA might pause its rate hikes in their next monetary policy meeting.
Later on, Australia reported a 1.8% rise in its leading index of economic indicators for August. The improvement in building approvals and rally in stocks contributed much to the advancement in the leading index, which has been steadily climbing since June this year. Still, the AUDUSD was unable to recover from being heavily clobbered by risk aversion.
Today, Australia will release its new home sales report. New home sales were up by a whopping 11.4% in August after seeing marginal improvements in June and July. If the report prints another strong figure for September, then the AUD might recover some of yesterday’s losses.
Watch out for the release of the US third quarter GDP reading later today. This report could cause quite a ruckus in the markets, especially if it beats the highly optimistic consensus. Economic growth in the US is expected to be at 3.2% in the third quarter after seeing a 0.7% contraction in the previous quarter. The actual figure is due 12:30 pm GMT and, if you are not a big fan of volatility, you might want to stay on the sidelines then!
The Aussie made a sharp “V” turn against the USD and the JPY yesterday after the US showed that its economy have grown by 3.5% during the third quarter. The AUDUSD went to as high as 0.9182 before closing at 0.9150. The AUDJPY also soared to 84.06 but closed a little lower at 83.64.
Australia’s HIA new home sales in September suddenly fell by 4.5% after posting an 11.4% gain during the previous month. The report, however, had a somewhat muted effect on the AUD.
Later in the day, a report showed that the US was able to get out of the rut for the first time this year. It even surprised everybody when it printed a 3.5% expansion during the quarter, better than the 3.2% initial projection. Much of the economy’s gain, though, could be attributed to the government and Fed’s stimulus programs. In any case, the stellar figures sparked another run for risk appetite which reflected positively on the higher yielding assets like the AUD.
Earlier today, Australia’s private sector credit for the month of September was published. The account measures the change in the total value of new credit issued to consumers and businesses. To the dismay of some, the account fell dropped by 0.2% during the month after gaining by the same rate in the month prior. A dip in the figure suggests that spending at least in the period covered may have declined as well.
The Aussie lost a little bit of support following the report.
No other economic reports are due in Australia today. The US, on the other hand, is slated to issue its core PCE index, Chicago PMI and personal and income spending. Positive results could support yesterday’s rally which would be beneficial for the AUD.
The Aussie ended the week on a sour note as risk aversion rose on concerns that global recovery wouldn’t be sustainable. The AUD/USD pair closed Friday just a few pips above the 0.9000 handle, almost 200 pips from its week open price.
Could it be that investors are starting to realize that this recovery we are experiencing is merely the product of the massive stimulus measures? Would the global economy, in the next couple of months, start to deteriorate once these support programs end? Nobody knows for certain but what we do know is that it has been risk sentiment that has been driving the markets since early this year. If this kind of pessimistic sentiment continues, expect to see the Aussie weaken this week.
This week will be big for Australia as the RBA will be announcing its decision on the country’s benchmark interest rates on Tuesday, 3:30 am GMT. The RBA has been the first among the G20 central banks to raise rates as they believe that they should be open to hiking rates as fast as they cut them when the recession began. The expectation for tomorrow is a 25 basis point hike, from 3.25% to 3.50%. Expect to see some Aussie buying if forecast holds.
Also watch out for the country’s trade balance for September on Wednesday, 12:00 am GMT. Australia’s trade balance, which measures the net difference in value between imported and exported goods in a given period, tends to create a significant market impact as the country’s trade industry makes a good chunk of its GDP. The consensus is a deficit balance of A$2.16 billion, significantly lower from last reporting period’s A$1.52 billion deficit.
The Aussie dollar was able to stay afloat despite the rocky waves in Monday’s trading session. The AUDUSD pair finished the day higher at 0.9035, up more than 70 pips from its opening.
The Aussie got off to a nice start as a report printed that housing prices rose by 4.2% in the 2nd quarter. This marked the second straight quarter that prices rose, and was also better than expectations of a 3.0% increase. This will be interesting to monitor in coming months, especially with the Reserve Bank of Australia raising rates recently. Will rate hikes eventually lead to a leveling out of home prices? Take note, RBA Governor Glenn Stevens has mentioned that rising prices was one reason why the RBA is raising rates – they want to avoid a housing bubble similar to the one that eventually led to this recession.
Speaking of the RBA and interest rates, the RBA will be releasing its interest rate decision later today at 3:30 am GMT. Some analysts expect that the RBA will hike the rate another 0.25%, bringing it up to 3.5%. I suspect that if we see another rate increase, we could see the Aussie dollar rise up once again…
We could see more big moves tomorrow, as building approvals and retail sales are due at 12:30 am GMT. Approvals are forecasted to have risen by 2.4% during the month of September, while retail sales is expected to have grown by 0.5% during the same period. If these figures do come in and show positive figures, this could set the tone for more AUD buying.
Risk aversion was on such a rampage yesterday that even a 25 basis point interest rate hike from the RBA was not enough to push the AUDUSD higher. Also, comments from RBA officials suggesting that the central bank would pause from hiking rates in December weighed down the AUD.
The RBA confirmed that economic growth in Australia has been stronger than expected, noting that there have been impressive improvements in various sectors of the economy. They also highlighted that the growth in China, their major trading partner, has contributed much to Australia’s economic expansion. However, they mentioned that the appreciation of the AUD is likely to constrain output and subdue inflation. According to them, inflation has been steadily declining in the past year and should continue to moderate. Still, they expect inflation to stay within target until next year.
But another rate hike next month may not be in the cards… Aside from the fact that the RBA has never implemented three rate hikes in a row, speculations that the central bank will not raise rates in December brewed from this part of the statement: “With the risk of serious economic contraction in Australia now having passed, the Board’s view is that it is prudent to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker.” It went on to say that the rate hikes in October and November are sufficient to increase the sustainability of economic growth.
Moving on… Australia has a couple of high-impact reports on today’s docket. These are data on building approvals and retail sales, both of which are due 12:30 am GMT. Building approvals are expected to surge by 2.4% in September after dipping by 0.1% in the previous month. Meanwhile, retail sales could print a 0.5% uptick in September, a slightly moderated increase compared August’s 0.9% rise.
Don’t forget that today is the date of the FOMC statement release. This report, which poses a huge event risk for the entire currency market, is due 7:15 pm GMT. Although the Fed is expected to keep rates at their current level, comments from Fed officials could have a big impact on risk sentiment. Price movements are likely to be extra volatile later on so be careful out there!
Met by a significant technical support at 0.9000, the Aussie rallied past the greenback to close at 0.9099. Buying interests could send the pair higher especially now that its uptrend is well intact.
While Australia’s annualized building approvals printed a 2.7% gain in September, participants focused more on the 0.2% contraction in the monthly [retail sales](http://www.babypips.com/forexpedia/Retail_Trade_%28Retail_Sales%29_-_Australia) for the same month. Worries were further compounded by the negative revisions in the previous figures of the two accounts. Building approvals in August were adjusted to -0.9% while retails sales were also downgraded to 0.7% from 0.9%. Remember that the Australian government handed out A$20 billion in cash to consumers. The recent results indicate that the effects of such on consumption are already fading. The recent drop in the figures could keep the [RBA](http://www.babypips.com/forexpedia/RBA) from raising its interest rate again this December.
The Aussie fell following the reports. Traders, however, took this as an opportunity to buy up the AUD in anticipation of the Fed’s decision to keep its rate unchanged at 0.25% for an expected period of time. This, of course, is bearish for the USD. Later in the day, the Fed indeed kept its rate as is.
Earlier today, Australia’s trade balance was released. The issue showed that the country’s trade deficit has widened to –A$1.85 billion in September from –A$1.65 billion. The latest tally is, however, better than the original –A$2.13 billion forecast. The surged in the country’s exports pared down the rise in imports. Such can be attributed to China’s strong demand for iron ore and coal.
The better-than-expected results usually translate positively on the AUD. This is not the case today, however, as the AUD fell in tandem with the NZD after RBNZ Governor Alan Bollard said that New Zealand’s recovery from the global recession will be slower than Australia’s.
In the mean time, RBA Governor Glenn Stevens issue a speech about “The Road to Prosperity” at 8:55 am GMT. During his last public appearance following a rate decision, he provided some clues regarding the RBA’s future monetary policies. He could do so again today.
The Aussie lacked direction yesterday as currency traders sit on their hands prior the upcoming NFP report from the US. Despite this uncertainty, things are looking bright for Australia as the RBA seems poised to further raise rates.
The RBA monetary policy meeting minutes just released showed that the bank believes that Australia’s economy would probably grow more than three times during the fourth quarter this year. According to the minutes, the expansion would probably come from increased business investment and exports. Experts are betting that the RBA would increase rates by 25 basis points in the next meeting. This could prove bullish for the currency as the country’s benchmark rate already stands at 3.5%, the highest among the G-10 nations. This would give additional reason for investors to use the Aussie as for their [carry trades](http://www.babypips.com/school/the_carry_trade.html).
No significant economic report up due today so expect the Aussie’s direction to be primarily dictated by shifts in risk sentiment caused by the NFP report from the US.
After a day of hesitation, the AUD made headway in Friday’s session. Good news from the RBA monetary policy statement helped boost the Aussie dollar, letting the AUDUSD close the week at 0.9178.
In its report, the Reserve Bank of Australia made changes in their forecasts for growth – to the upside! Woohoo! The central bank said that GDP would grow by 1.75% this year, and 3.25% next year. This is up from its initial August estimate of 0.5% and 2.25%. Given that the RBA now believes the economy is growing faster than anticipated, could this mean another rate hike is coming up this month? Just something to keep in mind…
Early today, a report revealed that home loans grew by 5.1% during September. This was higher than projections of a 3.1% increase. The AUD rose following the report.
Later today at 3:20 am GMT, RBA Assistant Governor Dr. Lowe Philip will be speaking at an economic conference. Since he does have a high ranking position in the RBA, traders do listen to his speeches. Could he drop some juicy gossip about potential rate hikes?
As the price of gold soared to a new high of $1111.7 per ounce, the AUDUSD climbed close to its most recent yearly high of 0.9328. USD weakness, which resulted mostly from the IMF’s comments about the overvaluation of the USD, added momentum for the pair’s ascent. Will it hit another yearly high this time?
As usual, the Australian economy has been showing signs of strength, particularly in its housing sector. Home loans surged by 5.1% in September, beating the consensus of a 3.1% increase and rebounding from August’s 1.9% decline. This was also the indicator’s strongest climb in the past six months. This shows that the Australian government’s programs to provide rebates for first-time home buyers are working their magic.
On a less upbeat note, the ANZ job advertisements reading fell to -1.7% in October, signaling that the country’s labor market may be in trouble. This was the indicator’s first drop in three months, hinting that Australia’s employment report due on Thursday this week might be weaker than expected.
But before that, Australia is set to release its index of business confidence at 12:30 am GMT today. The index has been steadily climbing since April and could post another uptick for October. If it does, then the AUDUSD pair might just chalk up a fresh yearly high…
The Aussie flirted again with its yearly high in yesterday’s trading. The AUDUSD, however, fell short and closed at 0.9302. In any case, it is possible for the pair to set a new yearly high since its longer term uptrend is still very much intact.
Business confidence in Australia, as measured in the NAB business confidence index, rose to 16 in October, which is its highest score in about 6 years. This adds to the possibility that the RBA will once again raise its interest rate come December. China’s growth has been greatly helping Australia’s export industry and it is one of the primary reasons why the Australian economy is performing better compared to its counterparts from the West. The increase in business confidence can be seen as an evidence that the country is now in a better economic position.
Speaking of China, the country is set to release its latest annualized industrial production and CPI data. Industrial production is expected to rise again by 15.3% after already posting a 13.9% gain in the previous period. China’s CPI is also seen to improve to -0.4% from -0.8%. Since China is one of the major trading partners of Australia, positive results from these accounts could also reflect positively on Australia’s economy and the AUD.
Earlier today, Australia Westpac consumer sentiment unexpectedly fell by 2.5% in November. This may give RBA Governor Glenn Stevens another reason to postpone another rate hike in December. Overall, consumer and business confidence are still on high levels.
For the rest of the day, trading of the AUD could turn light because of a bank holiday in the US.
The Aussie is doing it all again, marking a new set of yearly highs on account of better-than-expected economic data. The Aussie rallied all the way to 0.9370 when the employment change report printed unexpected results.
The [employment change report](http://www.babypips.com/forexpedia/Employment_Change_-_Australia), instead of showing 10,100 net jobs were lost in October, revealed that 24,500 net jobs were created. An increase in the number of employed people means that more money is put in the hands of consumers, thereby increasing their purchasing power. This could help Australia continue posting [GDP](http://www.babypips.com/forexpedia/Gross_Domestic_Product_%28GDP%29) growth, especially since consumer spending accounts for more than two-thirds of its economic activity. Despite this, joblessness in the country edged up to 5.8% from 5.7%.
No economic data set for release today but given the surge in risk appetite, we might see the Aussie gain a bit more ground today.
It looked like the AUD was going to set a new yearly high once again, but strong USD buying throughout the day actually brought the pair lower. The AUDUSD hit a high of 0.9370 before slumping the rest of the day to close the US session at 0.9226.
The Aussie had jumped after yesterday’s unemployment report, but couldn’t sustain these gains as the USD gained against all other majors. Could this be a mere case of profit taking after all the dollar selling the past few trading sessions?
With nothing coming up today, watch out for more potential profit taking that could take place to end the week. In addition, take note that the preliminary Univesity of Michigan consumer confidence and inflation indexes are coming out from the US at 2:55 pm GMT.