Daily Economic Commentary: Australia

AUD/USD found itself under heavy selling pressure again last week as the shifting monetary policy outlook continued to hurt the demand. The pair closed the trading week weakly at .9577, off its high at .9696.The pair is now at its lowest level since October of 2011.

Earlier today, the Aussie was pushed even lower due to a weak retail sales report. It showed a 0.2% increase versus the 0.3% forecast. It was still a welcome improvement from the previous report’s 0.4% decline.

The Aussie will be in focus again this week as the Reserve Bank of Australia (RBA) is scheduled to make its decision on interest rates on Tuesday. Market participants do not expect the central bank to make any changes especially after the previous month’s surprise 25 basis point rate cut. Pay attention to the accompanying statement though, as it could give us clues with regards to future monetary policy.

Also watch out for Australia’s GDP report. It’s scheduled to be released on Wednesday and it is projected to show a 0.8% growth for Q1 2013. In the quarter prior, GDP grew 0.6%.

Surf’s up, mates! The Aussie had a good day yesterday as Australia’s mixed reports and weak U.S. data translated to a strong comdoll across the board. AUD/USD shot up by as much as 149 pips and capped the day firmly above .9700.

Yesterday Australia’s retail sales numbers disappointed the markets when it came in at 0.2% instead of the 0.3% growth that many were expecting. The ANZ job ads also disappointed as it printed a 2.4% decline on top of last month’s 1.7% downtick.

Good thing that investors were mostly into the U.S. data yesterday. The Aussie (and many other high-yielding currencies) shot up against the Greenback when a weak U.S. manufacturing report hinted that the Fed would taper its asset purchases later rather than sooner.

Will the Aussie sustain its gains today? At 4:30 am GMT we’ll see the awaited RBA interest rate decision. Since the Aussie has weakened a lot since the last RBA statement, markets aren’t expecting the central bank to cut its rates further this month. But you never know, right? Remember that the RBA has surprised the markets once or twice before. Don’t even think of missing its statement!

If Australia is the Land Down Under, then AUD/USD is the currency pair that keeps going down under! The pair slid down the charts in yesterday’s trading, as it fell back below the .9700 major psychological level once more. Will it keep sinking today?

The RBA kept rates on hold in their monetary policy decision yesterday, but Governor Stevens said that the subdued inflationary pressures mean that there’s scope for further easing if necessary. On top of that, he also remarked that the Australian dollar is still overvalued in historical standards. With that, traders decided to dump the Aussie, as they speculated that another rate cut could take place this year and that the RBA might suddenly intervene in the forex market.

Today, Australia is set to print its GDP reading for the first quarter of the year. Analysts are projecting 0.8% economic growth, better than the previous quarter’s 0.6% expansion. However, a weaker than expected figure could worsen the Aussie’s slide and possibly trigger another test of .9600 for AUD/USD.

It looks like old habits die hard, eh? Once again, AUD/USD traded under complete control of sellers, as the pair slid 108 pips to .9538. Can it manage to stay below the .9600 handle?

The disappointing GDP results posted early in the morning pretty much set the tone for Aussie trading. With growth clocking in at just 0.6% (versus 0.8% forecasts), traders had another reason to dump the comdoll. As Forex Gump discussed in his latest Piponomics article, lower spending in machinery and equipment as well as a large decline in public spending shaved off up to 1.3% in growth. Yikes!

In just a few minutes (1:30 am GMT), Australia will be publishing its latest trade balance data. Survey says the trade surplus likely narrowed from 0.31 billion AUD to 0.20 billion AUD in April. If the surplus fails to match expectations (or if exports contract), the Aussie could be in for more losses.

Up, up, and away! The Australian dollar finally found some legs yesterday as it was able to rally strongly versus the U.S. dollar. AUD/USD started the day at .9538, climbed as high as .9675, and then closed the day at .9610.

The only data that was published in Australia yesterday was its trade balance. The trade balance showed a surplus of 30 million AUD, which was significantly lower than the 200 million surplus initially forecasted. According to the report, this was due to the huge decline in exports and the big increase in imports.

Nothing left on Australia’s economic cupboard but with the upcoming release of the U.S. employment report, the Aussie could find itself in a wild ride today. Check out Forex Gump’s latest blog post for tips on how to trade the report.

Just when you thought the Aussie was on its way up the charts after posting a win on Thursday, it drops like a rock! AUD/USD finished Friday’s trading in the red, closing 100 pips lower from its opening price at .9501.

No top-tier reports were released from the Land Down Under and this left the Aussie at the mercy of market sentiment. Unfortunately, the NFP report from the U.S. came in much better than expected and was enough to boost the dollar across the board.

Today, there are still no reports on the docket for the comdoll which means that we’ll probably see market sentiment continue to dictate the currency. With that said, make sure you gauge the market’s mood, ayt?

After gapping lower at the start of the week, AUD/USD inched higher and actually finished the day 29 pips above its open price. So what kept the bulls interested yesterday?

It’s not economic reports, that’s for sure. The Land Down Under didn’t release any economic report yesterday, so the Aussie bulls might have gotten their cue from slight profit-taking and overall recovery in risk sentiment.

Can the Aussie go for a back-to-back performance today? It’s already off to a rough start with the Australian home loans data showing only a 0.8% uptick in April when many had held their breaths for a 2.1% growth. Meanwhile, the NAB business confidence didn’t induce any fireworks as it only printed a reading of -1 just like last month.

The Aussie staged a late comeback, but it still wasn’t enough to push AUD/USD above its opening price. After trading as low as .9326, AUD/USD rallied to close at .9438 with a 23-pip loss on the day.

A couple of weak reports pretty much crippled the Aussie early in the day. First, the home loans report printed a 0.8% increase for the month of April, which is well short of the 2.1% surge that was expected. Furthermore, March’s 5.2% rise was revised down to just 4.8%.

Then we got news that business confidence in Australia is still in a slump. According to the NAB business confidence index, which was unchanged at -1, the business environment is improving but it’s in no way impressive. Capacity utilization and employment are still sub-par, and short-term demand is expected to stay weak. Yikes!

In other news, the Westpac consumer sentiment index just came out and it came with better news. The index rose from a reading of -7.0% to reveal a reading of 4.7%. So far, the rebound in consumer sentiment seems to be lifting the Aussie. But can we expect this to carry AUD/USD higher for the rest of the day? You’ll just have to watch and see for yourself, homies!

Crazy day for the Aussie, which just couldn’t hold on to its massive gains! After rising to as high as .9564, AUD/USD eventually settled at .9467, still 29 pips higher than its opening price.

Earlier today, Australia released labor market data and for the most part, the data was actually pretty good. Instead of job losses of 9,800, the labor market actually added 1,100 people to the work force. Meanwhile, the unemployment rate remained steady at 5.5%, after it was projected to increase to 5.6%.

Will this be enough to buoy the Aussie and push it to new highs? You might wanna hit up my USD commentary as well for other data that could affect AUD/USD trading over the remainder of the week.

Surf’s up, baby! The currency waves were favourable to Aussie bulls yesterday, as AUD/USD soared up the charts to finish at .9467, a solid 133 pips above its opening price. Will we see a repeat performance today?!

Aside from the better than expected job data that I pointed out yesterday, the Aussie also benefitted from overall dollar weakness and short covering. Keep in mind that, for the lack of a better term, that the Aussie has sucked it up the past six weeks, so it was only a matter of time until investors decided to lock in some profits.

If you’re part of the bull camp and are looking for a catalyst to push the Aussie higher, you’ll have to wait till the New York session, as we’ve got no data headed our way from Australia today. Good luck trading today mates!

In spite of the lack of economic catalysts, the Aussie was still able to experience a bit of volatility last Friday due to the shifting market sentiment. AUD/USD opened the day at .9634, rose to an intraday high at .9666, fell to .9567, jumped to .9657 again, and then closed the week at .9591.

As I said, no data was released last Friday, but this week, we’ve got a few of red flags. Today, for instance, the G-8 summit will begin. While it normally doesn’t have a big impact on price action, it could be different this time as the finance officials will be talking about the impact of the BOJ’s massive open-ended quantitative easing program on the economy. If G-8 officials show disapproval, we could see some wild action on the charts.

Also keep tabs on the RBA’s monetary policy meeting minutes. It’ll be released tomorrow at 1:30 am GMT. It’s going to give us a look into the RBA’s reasons for its monetary policy.

Stalemate! Yesterday the Aussie bulls and bears played tug-o-pips that ended in a tie as AUD/USD finished the day only 3 pips above its open price. Will we see a clearer direction today?

The RBA meeting minutes is a good start! Moments ago the RBA printed its meeting minutes, which showed the central bank’s concern that Australia’s overall growth is still below its long-term trend. They also emphasized that while the Aussie has fallen significantly since their last meeting, they still judge their currency as overvalued. And like in its past minutes, the RBA still believes that the current inflation outlook is giving them room for more rate cuts. Duhn duhn duhn duhn.

No other report is scheduled from the Land Down Under today, so you might want to pay attention to potential profit-taking or late reaction from traders in the London and U.S. markets. Oh, and don’t forget to watch out for price action of the Aussie’s counterparts as well!

Yikes! It looks like traders ain’t done dumping the Aussie! Once again, they took the comdoll lower as AUD/USD slipped 92 pips to end at .9479. Will the pair retest its former low at around .9330?

Blame it all on the RBA minutes, homies! It pretty much set the tone for AUD/USD trading as it crippled the Aussie early in the day. The latest minutes revealed that the central bank is still considering further easing and that policymakers would still like to see the Aussie exchange rate move even lower. Yikes! This practically gave traders the green light to keep selling the Aussie, which explains why it was one of yesterday’s weakest performers.

In other news, the CB leading index just printed a 0.3% rise, which is a decent improvement from the previous month’s 0.1% uptick. But is this enough to keep the Aussie from sliding further down? Probably not! Keep in mind that the FOMC statement is just a few hours away, so the markets will probably wait until after the statement before they decide to make their move.

Ka-chow! The Aussie got burned yesterday as it fell a solid 250 pips from its highs thanks to the FOMC statement. AUD/USD is currently trading below .9300, marking a new 2013 low!

The Aussie got killed once the markets went into a dollar buying frenzy following the FOMC statement. Make sure you hit up my USD commentary for the 411 on how the announcement went down!

Nothing lined up today, but it’ll be interesting to see whether the Aussie will continue to slump down the charts. If the Greenback continues to rally, chances are we’ll see the Australian dollar falter yet again.

Guess who has a huge letter L on its forehead? Yep, that’s right, it’s the Aussie! AUD/USD slipped below the .9300 major support level yesterday while AUD/JPY tumbled below the 90.00 handle. What the heck happened?!

As it turns out, China printed another weak PMI figure, which showed that the manufacturing industry had a deeper contraction in June. The actual HSBC flash PMI figure dropped to a new record low of 48.3, lower than the estimated 49.4 reading. It doesn’t help that the previous month’s figure was revised down from 49.6 to 49.2, revealing that May’s contraction was worse than initially reported. With Australia being China’s number one trade partner, the downturn in manufacturing could mean lower demand for Australia’s commodities and raw materials exports.

There are no reports on Australia’s schedule for today, which suggests that the downbeat sentiment from yesterday could continue to weigh on the Aussie’s movement. Be mindful of potential profit-taking before the week comes to a close though!

Yowza! After five days of consecutive losses, the Aussie finally managed to take a breather in Friday’s trading. AUD/USD closed higher at .9235 from its opening price of .9197.

But don’t get too excited! Some analysts think that its performance on Friday was nothing more than just a bit of profit-taking.

No reports are due from Australia today. If you plan on trading the currency, it would do you well to keep tabs on market sentiment. Remember that it usually does well when risk appetite is up while risk aversion tends to drag it down.

Good luck!

Back-to-back, baby! For a second day in a row AUD/USD printed greens following a series of red candles on the daily chart. The pair closed 67 pips higher after hitting an intraday high at .9300. Booyah!

As I mentioned in my other updates, we didn’t see any major economic report yesterday. Unfortunately, we won’t be seeing anything at all from Australia this week save for the private sector credit data due on Friday. This means that you have to keep your eyes peeled for any news that might affect the comdolls’ price action. More specifically, watch out for price action on gold, concerns over China, and overall risk appetite.

Good luck and good trading, mates!

If range trading is your thing, then you probably loved AUD/USD’s price action. AUD/USD simply moved within a 100-pip horizontal range yesterday as it found support at the .9200 major psychological level and resistance at .9300. The pair closed the day at .9267, which was merely 3 pips higher from its opening price during the Asian trading session.

The pair’s ranging behavior could be attributed to the lack of economic data and the lower liquidity of the summer. We could see this kind of movement again as there’s really nothing of interest on the economic calendar again. Watch the previous day’s highs and lows, as they could hold today.

Well, well, well… Look who has come back from the dead! The Aussie gave a rare showing of strength yesterday as it ended stronger against both the dollar and the yen. What’s up with that?!

It seems Aussie bulls have China to thank for the rally. Analysts attribute the rise in the comdoll to the continued decline in Chinese interbank interest rates, which helped restore confidence in the markets and revived demand for commodities.

In other news, Julia Gillard was ousted by Kevin Rudd, who was just sworn in as the new Prime Minister. He was reinstated after a party room coup, as Gillard’s public support has declined over time. So far, the markets seem to be taking Rudd’s return as the PM well, as the Aussie is off to a strong start today. But is this something that will continue to fuel the Aussie’s rally? Only time will tell!

AUD/USD spent a good part of the Tokyo and London sessions above .9300. But all of a sudden, the Aussie crashed during the New York session! AUD/USD dropped from an intraday high of .9339 to finish the day at .9279.

It would seem that the Aussie fell victim to the dollar’s strength which was fueled by better-than-expected data from the U.S.

Given that we still don’t have any data on tap from Australia today, it would do you well to keep tabs on reports from the Aussie’s counterparts. Who knows, they could once again dictate the comdoll’s price action. Good luck!