The Aussie beat the living daylights out of the greenback last week as it climbed close to its recent yearly high of 0.9370. No economic reports were released from Australia last Friday but increased risk appetite, coupled with bullish sentiment for the Australian economy, boosted the Aussie.
Minutes from the latest RBA monetary policy meeting are due on this week. Recall that, during their November rate statement, there were hints against the possibility of another rate hike come December. The minutes of their November meeting, set for release on Tuesday 12:30 am GMT, could shed more light on this matter. If the central bank confirms that they will pause with their rate hikes, then this could weigh down the Aussie.
On Wednesday, the MI leading index and wage price index are due. The leading index of economic indicators climbed by 1.1% in both July and August. Would it post another increase for September? We’ll find out by 12:00 am GMT. Meanwhile, the wage price index is slated to climb by 0.7% in the third quarter, reviving inflation concerns.
In terms of economic releases from Australia, well, that’s all forex folks! Even though Australian economic data is light this week, price movement of the AUDUSD pair could be strongly affected by risk sentiment and economic data from the US… and I’m telling you, the US calendar is jampacked!
The Aussie made another round of plunderin’ against the greenback in yesterday’s barter. The AUDUSD traveled to another unchartered territory as it marked a new yearly high at 0.9407 before closing at 0.9384. Could the pair surpass its new high today? We shall see.
Australia was quiet in terms of economic reports yesterday. The AUD got some lift as traders and investors favored the riskier assets due to a 1.4% gain in October retail sales in the US.
Earlier today, the RBA released its MPC meeting minutes. According to the RBA, the pace future interest rate increases is still an “open question” after it raised its rate to 3.5% during their last meeting. Presently, the minutes say that the bank is still trying to weigh up the risk of leaving borrowing costs cheap given the possibility that the economy’s recovery could taper because of the expiration of the government’s stimulus programs.
Later at 1:30 pm GMT, the US will be published its October PPI. PPI for the said month is expected to rise to 0.6% from -0.6%. A jump in the index could lead to a similar gain in CPI which could reflect positively on the economy at least in the short term. Such could give the other higher yielding assets like the AUD some short term support.
After two days of gaining, the Aussie finally gave in yesterday and dipped to a low of 0.9237 before finding some buying support. The Aussie eventually closed the US session at 0.9307.
The wage price index for the third quarter of 2009 just released came in line with forecast. The report showed that the cost of labor for businesses rose once again, this time by 0.7%. However, note that this 0.7% gain was the slowest since 2002. Digging deeper into the report would reveal that the slow growth was caused by the sharp fall in worker hours.
No economic data is due for the rest of the day so the Aussie’s price action would probably rely on economic data from the US at 1:30 pm GMT. The US reports to watch out are the CPI, housing starts and building permits. The CPI is predicted to show that the prices of goods and services purchased by consumers increased 0.2% in October while housing starts and building permits are expected to have risen to an annualized rate of 610,000 and 590,000, respectively. If these reports come out higher-than-expected, risk appetite could surface again and provide support for the Aussie.
Pressure on commodity prices left the AUDUSD ranging yesterday. Like other com-dolls, the AUDUSD traded within a range, closing slightly lower at 0.9298, just 10 pips away from its opening.
Early this morning, the Reserve Bank of Australia released its monthly bulletin. The report didn’t have much effect on the markets, as everything contained in the bulletin was already known when the minutes of the latest RBA meeting were released earlier this week. RBA Assistant Governor Guy Debelle also delivered a speech this morning as I was writing this. It seems, however, that the markets didn’t react too much to his comments.
Nothing left for the rest of the week. Be on the lookout for commodity trading, especially that of gold, as it had been setting new highs earlier this week.
Yesterday, the AUDUSD took a sharp dive as risk aversion haunted the markets once again. Commodity prices, which edged lower, were unable to provide support for the AUD.
No major reports were released from Australia yesterday, which was probably why the AUD easily crumbled under risk pressures. The risk aversion wave swelled as US President Obama warned of a double-dip recession, causing the AUDUSD to dive below the 0.9200 level.
Today, no economic reports are due from Australia again. The AUD could continue to lose ground as investors flock to the safe-havens USD and JPY but there’s also the chance that it could recover some of yesterday’s losses.
The Aussie slipped again for a fourth day in a row against the dollar last Friday. The AUDUSD fell to as low as 0.9061 but closed at 0.9155. The pair, though, could rebound any time soon since it is already trading near its long term uptrend line.
Later today at 11:00 pm GMT, Australia’s Conference Board leading index will be issued. The index logged a 1.8% gain in August. As the name suggests, the index is used as a leading indicator of Australia’s economy. Another expansion in September could point to a growth in Australia’s economy which could also give some lift in the AUD.
On November 25, Australia’s private capital expenditure for the third quarter will be published. Private investments in Australia are seen to have increased again by 1.1% during the third quarter after already posting a 3.3% during the previous period. The investment account takes up about 28.5% of Australia’s GDP. Given this, a rise in the figure could contribute more to Australia’s economic growth. Such could also reflect positively on the Aussie at least in the short term.
It was a wonderful day for Aussie bulls yesterday as the long-term uptrend remained intact. The Aussie, upon hitting the 0.9100-0.9150 region, quickly staged a stellar rally and ended the US session almost 150 pips higher from its lowest point during the Asian trading session.
It seems that the rally was both technically and sentimentally motivated. On the technical side, the ascending trend line all the way from March helped the Aussie find some technical support. As for sentiment, economic data from Canada, namely the retail sales report, helped prop up risk appetite as it came out much higher than expected. Instead of growing 0.6%, retail sales for September rose 1.0%. The gain, according to analysts, confirms that Canada’s recession indeed returned to growth during the third quarter this year.
Australia’s [Conference Board leading index](http://%E2%80%9Dhttp://www.babypips.com/forexpedia/Conference_Board_Leading_Index_-_Australia%E2%80%9D) just released showed another expansion in September, this time by 0.3%. Although the reading was much lower than the previous reporting period’s 1.5%, it still points that Australia’s economy is heading in the right direction.
The next economic data due is the report on construction work done for the third quarter of 2009. It measures the change in the amount of construction jobs done for the given period. The estimate is an increase of 0.1%, slightly higher from last reporting period’s -0.1%. The actual figure is due at 12:30 am GMT.
It looked like the Aussie dollar was going to go way “Down Under”, but a fresh run of risk appetite helped boost the AUD. The AUDUSD pair closed at 0.9192, but not after dipping as low as 0.9132 in intraday trading. With Thanksgiving coming up, what will we see from traders today?
Early this morning, a report revealed that construction work done in the past quarter rose by 2.2%. This was a nice increase from the previous quarter’s reading, which showed growth of just 0.1%. Another sign of recovery? Maybe, just maybe!
Tomorrow, the private capital expenditures q/q report will be released at 12:30 am GMT. The report measures how much private business have spent on capital expenditures. It is expected to show growth of just 1.1%, down from the previous quarter’s rise of 3.3%. If these figures come out worse than expected, could we see some dollar buying? With US traders heading off for the holiday, I’ll be on the lookout for potential profit taking. Over the next couple of days, be careful as we may see exaggerated movements in the market caused by low liquidity! Stay on your toes my forex friends and good luck trading!
Words from RBA official Ric Battellino saying that Australian economy is in a “new upswing” were like pixie dust for the AUDUSD. Combined with happy thoughts and a very upbeat outlook for the “Land Down Under”, this enabled the AUDUSD to fly past the 0.9300 level.
According to Battellino, it is reasonable to assume that Australian economic growth will continue for the next few years. He pointed out that it has been nearly twenty years since the country has seen a negative GDP reading. His optimistic comments then gave rise to speculations of another rate hike next month, causing the AUD to surge. Profit-taking before the Thanksgiving holidays, increased risk appetite, and a rally in commodity prices also contributed to AUD strength.
On the economic front, data has been strong as well. Construction work done for the third quarter rose by 2.2%, beating the forecast of a 0.1% uptick.
For today, data on private capital expenditures will be released at 12:30 am GMT. A 1.1% increase is expected for the third quarter and, if the actual figure beats the consensus again, we might see the AUD make further headway.
A day after busting up the dollar, the Aussie took one on the lip yesterday, as it got shredded by all the haymakers thrown by USD bulls in yesterday’s trading round. The AUDUSD fell and hit the canvas, barely making the 8 count to stand at 0.9128. Will the AUD survive the last round of the week? Or will we see a last second TKO?
The AUD was also hurt by the private expenditures q/q report, which came in worse than expected. The report unexpectedly showed a decline of 3.9% in capital expenditure. The decline was caused by a dip in spending by manufacturing companies. With this in mind, could this give incentive for the RBA to hold rates at current levels? Take note that the RBA will releasing its interest rate decision next week. Word on the street has been that they could hike rates once again…
With not much economic data coming out today and US traders are still on holiday - going to their local appliance store to buy that 50” LCD TV at half off – we could see more range bound movement today. Still, be on your toes as we could see some volatile spikes with the low liquidity. Good luck trading!
Similar to the other majors, the AUD lost its grip against the relatively safer USD and JPY last Friday. But despite the slide in the US capitals markets due to Dubai’s default threat, the Aussie still managed to stage a late rally, paring down its losses during the week.
Earlier today, data on Australia’s private sector credit and HIA new home sales for the month of October were published. New home sales continued to slide by 6.0% in October after already losing by 4.5% during the previous month. Australia’s private sector also came in below expectations at 0.0%. The consensus was for a 0.2% gain. These results do not reflect well on Australia’s economy and generally should be bearish for the AUD.
In spite of the weak figures given above, the AUD still rallied against the JPY and the USD. Note that the RBA will have its interest rate decision tomorrow at 3:30 am GMT. The bank is expected to raise its interest rate from 3.50% to 3.75%. This could be the reason why the AUD is rising now. Investors could be positioning their trades in anticipation of the bank’s rate hike.
PipDiddy,
I was looking at the aud/usd and I was thinking that momentum was building and because of the rate decision due out tomorrow that shorting this pair at .9300 would be a good oppertunity. Seems to be some resistance at that level looking in the past.
Ranging was the name of the game for the AUDUSD yesterday, leaving the pair to close slightly higher at 0.9159. It appears that traders are preparing for the Reserve Bank of Australia’s interest rate decision due later today at 3:30 am GMT.
Word on the street is that the RBA will most likely hike interest rates today from 3.50% to 3.75%. Those leaning towards a rate hike point to good labor conditions, an improving housing sector and more confidence from businesses and consumers alike as reasons why there is room to increase interest rates. On the other hand, some believe that a rate hike could dampen consumer spending for the holiday season. In addition, at the most recent G20 meeting last month, most other nations said that they would be keeping rates at current levels for the meantime. Will the RBA might give in to peer pressure and try to fit in?
Take note that the RBA hasn’t raised rates 3 months in a row in the past 6 years. At the same time though, the RBA isn’t scheduled to meet in January, so they may just compensate for that by raising interest rates. Ah, decisions decisions. Maybe they should just flip a coin eh?
RBA goes for the three-peat! The Australian central bank hiked rates for the third consecutive time, carrying its benchmark rate to 3.75% this December. You’d think that the AUD would shoot up after the rate statement… but it didn’t!
The AUDUSD fell after the RBA rate statement probably because traders have already priced in the rate hike expectations and locked in their profits right away. Also, the rate statement made no clear indication about the schedule of future rate hikes, leading some to think that this one might be the last. The RBA noted that, while the Australian economy is in a gradual recovery, the effects of the stimulus on demand are slowly fading. They also highlighted that labor market conditions are starting to improve.
Meanwhile, building approvals for October unexpectedly fell by 0.6%, against the consensus of a 2% increase. This marks the indicator’s first decline in five months after the Australian government reduced their grants to home buyers. Also, recall that new home sales reportedly dropped by 6% in October, suggesting that the central bank’s higher rates are starting to have a negative impact on the housing industry. How so? Well, the RBA is starting to tighten their monetary policy, right? Tighter credit means it’s tougher to get housing loans!
Today, Australia has only the AIG services index on tap. The index stood at 54.8 in October and could post another improvement for November. Watch out for that by 10:30 pm GMT.
There was not any one big directional movement in the Aussie yesterday as it just ranged between 0.9250 and 0.9296. A breakout to the upside may be on the horizon especially if risk appetite persists. Will the Australia’s retail sales be that catalyst?
No economic reports were issued in Australia yesterday. Also, no major positive economic catalysts were at hand in the US. The US markets settled flat. The AUDUSD did so as well.
Earlier today, Australian retail sales for October came in line with expectations at 0.3%. Department store sales is component with the biggest gains of 1.9%. The AUDUSD rose in anticipation of the increase. However, it remained stuck within the range that I mentioned above even after the report’s release.
Meanwhile, data on the US initial jobless claims for the week ending November 28 will be published later at 1:30 pm GMT. Claims are expected to rise from 466,000 to 479,000. Such could temper the market’s optimism and could be bearish for the higher yielding assets like the AUD.
The Aussie started the day on the rise as traders anticipate an increase in Australia’s retail sales. It was even able to reach its monthly high against the dollar at 0.9323. But it was all downfall from there with the AUDUSD closing back to where it opened – 0.9257.
Looking at yesterday’s price action, the AUD started its decline during the early stages of the euro session. It was further held down when ECB President Trichetstated that the bank will keep the liquidity in the banking industry in check for a “long time.” Most non-dollar currencies sold off after his announcement.
Today will be quiet in Australia in terms of economic reports. Though, volatility may ensue later with the release of the NFP report in the US. Non-farm payrolls are seen to improve to -119,000 from -190,000. Such big improvement could bring back risk appetite and therefore could be reflected positively in among the higher yielding assets like the AUD.
The Aussie dollar got swept away by wave upon wave of USD buying that occurred on Friday. Traders brought the AUDUSD down to close much lower at 0.9144, a drop of over 100 pips.
Australia’s economic cupboard will be full this week, as a slew of medium to high impact reports are all on deck.
Tomorrow, at 12:30 am GMT, the current account and NAB business confidence index will be released. My mates over at customs say that deficit could widen to 16.7 billion AUD, up from the 13.3 billion AUD figure the previous month. Meanwhile, analysts have no forecasts for the confidence index. In its November release, the index printed a reading of 16, indicating that businessmen feel that economic conditions are improving.
Later in the day at 8:15 am GMT, Reserve Bank of Australia Govenor Glenn Stevens will be speaking at the Australian Business Economists Annual Forecasting Dinner. Given how the RBA has been raising interest rates the past couple of months, traders will be on the lookout for any clues as to whether this will continue in the following months. We may see some strong moves during this time, so watch out.
Also scheduled for release tomorrow evening at 11:30 pm GMT is the Westpac consumer sentiment index. Take note that the index indicated that consumer sentiment dipped last month, as the index fell by 2.5%. If the index shows another dip in sentiment, it may be bearish for the AUD.
In any case, the major report to look out for this week will be the employment data coming out on December 10 (Thursday) at 12:30 am GMT. Projections are that just 5,300 jobs were added to the Australian economy this past November and that the unemployment rate will rise to 5.9%. I’ll be waiting to see if the reports show a larger than expected rise, just as how the Canadian and US reports did last week. If employment does rise greater than expected, we may see the AUD continue its bullish ways.
US dollar strength lingered yesterday, leaving commodity currencies weaker across the board. Although Australia’s job advertisements were reportedly higher in November, the Aussie was unable to have a fighting chance against the US dollar.
According to ANZ, the number of jobs advertised in Australia’s major newspapers rose by 5.2% in November. Job ads in newspapers surged by 8.3% while internet job advertisements climbed by 5%. This rebound was most likely a result of Australia’s strong economic growth but analysts say that it will hardly help employment from picking up pace as well. Eventually, a continued increase in job advertisements could translate to employment growth but the unemployment rate is still projected to peak at 6.5% next year.
Meanwhile, the AIG construction index sank back into contractionary territory as it fell from 50.9 to 47.6. Construction activity has been contracting for two consecutive months with new orders and employment getting weaker.
Freshly released data from Australia good give the Aussie a bit of a boost for today’s trading. The Land Down Under’s current account balance came in better than expected even though the deficit widened from 13.1 billion AUD to 16.2 billion AUD. Also, NAB business confidence rose from 16 to 19 for November, indicating that business conditions continue to improve.
Up ahead, RBA Governor Glenn Stevens is scheduled to speak at the Australian Business Economists Annual Forecasting Dinner in Sydney. Hmm, forecasting, you say? Forecasts of future rate hikes, perhaps? Better stay tuned at 9:30 am GMT!
The Aussie is presently hanging on a thin thread against the dollar and the yen as the Aussie bears once again took over yesterday’s trading. The AUDUSD slid to 0.9044 from an opening of 0.9113 while the AUDJPY also fell to 79.90 from 81.59.
Yesterday, RBA Governor Glenn Stevens spoke at the Australian Business Economists Annual Forecasting Dinner, in Sydney. In his speech he mentioned that balance-sheet regulation or credit regulation will not work effectively given a low level of interest rate. Note that the RBA was the very first central bank to raise its interest rate amid the recession. So far, the bank has hiked its rates three times this year already. While others said that doing so would hamper Australia’s growth, specifically its exports industry, Stevens believed that demand from China would pull through and it did. Anyway, Stevens did not mention anything about future monetary policies. Though, he said that the next biggest issue that needs to be tackled by regulators would be about the “too big to fail institutions.”
Meanwhile, data Australia’s home loans and trade balance for the month of October are due today at 12:30 pm GMT. The number of financed homes is seen to drop by 1.9% after jumping by 5.1% during the previous month. If the number of loans that were awarded indeed fell, the more selling pressure could stack up against the AUD.
On a separate report, Australia’s trade deficit is expected to have improved to –A$1.75 billion from –A$1.85 billion. The account measures the difference between Australia’s imports and exports. With China’s industrial production believed to have soared by 18.2% then it’s is possible for Australia to log in with a better than expected result. Such would be bullish for the AUD.
Economic data released failed to move the Aussie decisively on Wednesday, keeping the Aussie well within its session high and lows.
The trade balance, the country’s main report when it comes to gauging the health of its trade sector, printed a A$2.38 billion deficit. This was much larger than the A$1.75 billion deficit expected. It’s not all bad, however, as diving deeper into the report would reveal that the increase in deficit was caused by the decline in the PRICE of exports, and not trade volume.
The employment data for the month of November caused the Aussie to soar just now though. Its employment situation report showed that joblessness in the country eased to 5.7%, down from October’s 5.8% figure. This caused gave the bulls a lot of fuel since the forecast was for joblessness to worsen to 5.9%. The section on employment change also printed surprising results. It showed that the economy added 31,200 net jobs, which was a huge difference from the 5,300 net jobs initially predicted.
No more economic data left for Australia this week so the Aussie’s price action would be primarily moved by news coming out of other countries. Special mention goes to retail sales report from the US tomorrow at 1:30 pm GMT. A better-than-expected figure could bring on some risk appetite, which could provide more fuel for Aussie bulls.