AUDUSD Fundamentals (based on dailyfx article)
Domestic policy returns
to focus for the Australian Dollar in the week ahead as all eyes turn
to the RBA interest rate decision. Economists’ expectations suggest
Governor Glenn Stevens and company will leave the baseline lending rate
unchanged yet again. The markets seem to agree, with a Credit Suisse
gauge tracking the priced-in policy outlook putting the probability of
an adjustment at a mere 1 percent. That puts the spotlight on the
statement accompanying the announcement, with traders combing through
the document’s verbiage to tease out the central bank’s thinking on
where it intends to go in the months ahead.
For the past two months, the combination of the
post-meeting RBA statement and the subsequent release of minutes from
the sit-down have left investors with a dovish lean in their forward
outlook. The statements themselves have struck a fairly neutral tone,
steadfastly arguing for a period of stability in benchmark borrowing
costs. The minutes have added some dovish color, reflecting a central
bank uneasy about a return to tightening. That is not surprising:
Australian economic news-flow has dramatically deteriorated relative to
consensus forecasts since mid-April, warning against taking any steps
that might make matters worse.
July’s meeting seems likely to offer more of the
same. While the economy continues to look fragile, it does not seem to
have become substantially more so since policymakers convened in June.
That opens the door for the status quo to remain in place.
Interestingly, the absence of a change in the RBA’s posture may still
carry important directional implications for the Aussie. Having
previously moved tracked closely with Australia’s 2-year bond yield,
the currency has increasingly diverged in recent weeks. While the
Australia-US front-end yield spread has moved sharply lower, AUD/USD
has continued to oscillate in a range loosely defined between the 0.92
and 0.95 figures.
On balance, this seems to leave the door open
for a correction. Moving past the RBA announcement without material
changes to the landscape may put a spotlight on the increasingly
disconnect between the exchange rate and relative policy bets, forcing
the Aussie to correct downward. The move may be amplified by a set of
high-profile US data releases. Manufacturing- and service-sector ISM
figures as well as the closely-monitored Nonfarm Payrolls reading are
in the spotlight. Expectations call for only nominal changes on both
fronts, keeping the present setting of investors’ Fed policy bets
broadly intact. Cumulatively, the emerging narrative tells of a US
central bank that is cautiously reducing stimulus and an Australian one
that isn’t, prodding investors to take heed of the shifting landscape
and respond accordingly.
EUR/USD Forecast Jun 30-Jul 4
not go too far in the last full week of the quarter, and remained in
range. It might be just the time now for the pair to pick a direction:
the ECB meeting is undoubtedly the highlight of the week, yet also
inflation numbers will eb closely watched. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD.
Forward looking PMIs in the euro-zone fell short of expectations, especially in France. Germany is not doing too well either, with a drop in the IFO Business Climate.
However, German inflation is finally moving up and this could calm the
ECB. In the US, there seems to be an even clearer separation between
the horrible first quarter (as reflected in a 2.9% annualized contraction of GDP) and the more upbeat economic activity in Q2, as seen in strong home sales and consumer confidence.
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2014-06-30 06:00 GMT (or 08:00 MQ MT5 time) | [EUR - German Retail Sale]
if actual > forecast = good for currency (for EUR in our case)
[EUR - German Retail Sale] = Change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Also Called : Real Retail Sales.
German Retail Sales Fall Unexpectedly In May
German retail sales fell unexpectedly in May from the prior month, official data revealed Monday.
sales were down 0.6 percent month-on-month in May, but slower than the
1.5 percent drop seen in April, provisional results from Destatis
showed. This was the second consecutive fall in sales. Economists had
forecast a 0.8 percent rise in turnover in May.
turnover grew 1.9 percent in May from the same period of last year, when
it was expected to rise by 1 percent. Nonetheless, the rate of growth
slowed from 3.2 percent logged in April.
Compared with the
previous year, turnover in retail trade was in the first five months of
the year in real terms 1.4 percent larger than that in the corresponding
period of the previous year.
The saga at 0.9400 in AUD/USD continues
We’ve had more episodes at 0.9400 than Dallas and we could have yet another failure on the cards.
We’ve just knocked below it but only by 4 pips but it’s looking like more upside disappointment for the bulls.
Since the beginning of the month the 100 h4 ma has acted as good support and at 0.9380 is worth watching.
Further down we have the 200 h4ma coinciding with the 55 dma at 0.9329/33.
While we remain below 0.9450 the risk of a bigger fall looms larger.
2014-06-30 14:30 GMT (or 16:30 MQ MT5 time) | [USD - Dallas Fed Manufacturing Business Index]
[USD - Dallas Fed Manufacturing Business Index] = The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly
to obtain a timely assessment of the state's factory activity. Firms are
asked by Federal Reserve Bank of Dallas
whether output, employment, orders, prices and other indicators
increased, decreased or remained unchanged over the previous month.
Survey responses are used to calculate an index for each indicator. Each
index is calculated by subtracting the percentage of respondents
reporting a decrease from the percentage reporting an increase.
The Dallas Fed's latest manufacturing outlook survey is out, and the numbers look good.
The headline index jumped to 11.4 in June from 8.0 in May.
Economists were looking for a reading of 8.5.