AUD/USD news - page 16
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AUD/USD knocking on 0.80 – levels to watch
The weakening of the US dollar has been seen across the board, but perhaps the most pronounced move is against the Australian dollar.
AUD/USD is trading just under the very round level of 0.80. Break or bounce? And what levels should we look at?
The Australian dollar still enjoys strong employment numbers and now also some speculation that the RBA will refrain from cutting once again, especially as inflation is firmer. This Aussie strength was accompanied by USD weakness, that just got another punch from weak consumer confidence.
The latter move sent the pair to a high of 0.7990, just 10 pips from the very round number, which is obvious resistance.
Quite close by, the 0.8030 level provided support back in January and is immediate resistance, especially in the case of a false break above 0.80.
The next resistance lines are further along: 0.8215 capped the pair early in the year, and the round 0.83 level was the last run of the pair before collapsing. Further above, we find 0.8360 and 0.8420.
On the downside, 0.79 is a round number that also worked as resistance in February. 0.7840 had the same role in April. The next level is 0.7750 which was a gap line, and 0.7675 which was the bouncing point
Aussie Back Below $0.80 Handle Before FOMC Statement
After trading with gains upwards of 2% on Tuesday, the Australian dollar looked somewhat softer on Wednesday.
The AUD/USD pair fell 0.47% to $0.7985 on Wednesday morning in Sydney, from $0.8020 where the pair closed on Tuesday evening in New York just hours earlier, but was still much higher than $0.7860 where the pair sat 24 hours ago.
The currency was the strongest performing on Tuesday after a huge US-dollar sell off was also negatively influenced by a poor reading of a US consumer confidence gauge.
However, traders appeared to have overdone their greenback selling on Tuesday ahead of Wednesday's Federal Open Market Committee (FOMC) statement.
The US monetary-policy setting committee will share its thoughts on the expected track for interest rates later today, which could be a big mover for the greenback.
Expectations of the first rate hike have been pushed out over the last few months as lackluster economic data has indicated that the country is not quite ready to be weaned off stimulus.
Meanwhile, in Australia the central bank has disappointed expectations of a rate cut since February, but next week's meeting may see the bank deliver.
AUD/USD forecast for the week of May 4, 2015
The AUD/USD pair broke higher during the course of the week, and even managed to break above the 0.80 level. However, massive selling towards the end of the week ended up forming a wicked looking shooting star. The shooting star is of course a very negative sign, and as a result we believe that a break below the bottom of this candle could more than likely send this market down to the 0.75 level. We believe that this market should continue to bounce around between the 0.75 level, and the 0.80 level. With that, even though we have a very nasty looking shooting star the weekly chart, we believe this will be a short-term traders market.
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RBA decision leaks ... its time to stop blaming the HFTs and algos
We've had February, March and April RBA decisions so far this year (January was holiday time).
3 decisions, and 3 consecutive times the markets have moved in the correct direction in the seconds leading up to the announcement.
The RBA have conducted an investigation and in the previous Minutes said the movement ahead of the announcement is all just a lack of liquidity.
Yeah, right. Thats pretty much all I need to get every single trading decision right, a perfect 100% record (so far this year), just a lack of liquidity and all of a sudden I know perfectly which way the Board is going to go and which way the markets are going. FFS.
Anyway ... a lot of the blame is being laid at the feet of the high frequency traders and algos (the two are often used, wrongly, interchangeably, but I'll let that go for now) for the early info. But ... its time to stop blaming the HF and algo traders.
'Cause we got a decision coming up tomorrow from the RBA (0430GMT on May 5). And, we don't need to wait for the decision - it's a 25bp cut.
One of the better Australian RBA watchers out there, Peter Martin of the Sydney Morning Herald has the early news. Ryan spotted it back on Thursday and let ForexLive traders know.
Bolding is mine.
Of course, there is always a doubt, its never a certainty, is it? No, not this time (see bolded). Martin was quoted over the weekend in another piece from another of the excellent team at the Sydney Morning Herald, Michael Pascoe:
No need to wait.
It's a cut. Time to lay off the HFT and algos. Forget seconds and millisecond leaks. Think days.
Will The RBA Be Cutting Rates Tonight?
The dollar was mildly bid at the start of the week with USD/JPY holding above the 120.00 level while EUR/USD slid further to 1.1150 before finding some support. Trading remained relatively quiet with Japan and UK markets closed for holidays and little fresh news on the economic calendar.
The final EZ PMI Manufacturing data rose just slightly better than expectations, printing at 52.0 versus 51.9 eyed, but the individual reports showed a lot of variance. In Germany and Italy the final readings were better than expected, with Italian PMIs rising to their highest levels in more than a year. However, in France and Spain the data lagged, with French manufacturing still stuck in contractionary territory at 48 versus 48.4 projected.
The latest manufacturing results show that the EZ continues to benefit from the lower exchange rate, but the gains are uneven and there is little upside momentum in the data. Over the past several weeks the euro staged a massive short covering rally, fueled primarily by the disappointing misses in US economic results that have shifted investors expectations of a Fed rate hike to September, and perhaps even later than that. However, having now risen nearly 800 points off the yearly lows, the euro is likely to pause at these levels; The lackluster growth in the region could weigh on the pair as investor focus returns to fundamentals once again.
Meanwhile in Australia, the speculation centers on whether the RBA will cut rates at tomorrow's monthly meeting. The latest reading from the OIS market shows that it's pricing an 80% chance of a cut. The expectations have been fueled by "leaks" in the Australian press, specifically the Sydney Morning Herald which has predicted confidently that the RBA will cut.
Certainly the data from China, along with the sliding prices for iron ore, suggest that the mining sector in Australia will face a very challenging environment this year and that is sure to weigh on the Australian economy as a whole. On the other hand, the AU economy has been able to rebalance surprisingly well, as it shifts to more services and housing activity. Labor conditions have not deteriorated badly, with the latest job adverts rising 2.3% versus a -1.3% decline the period prior. More importantly, the housing market remains on fire, spurred largely by already low interest rates. The latest data on Building approvals today showed a rise of 2.8% versus forecasts of -1.7% decline.
With the housing boom in full force and with many Australians now using their superannuation pension accounts to finance further real estate activities, the RBA is justifiably concerned about the negative effects of lower rates on the already dangerous housing bubble. That's why tomorrow's decision may be closer than the market thinks and the monetary authorities in Sydney may choose to remain stationary for another month or more.
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AUD/USD: Aussie Edges Up Amid Calls to Sell
The Australian dollar was flat, battling against heavy easing bias pressure ahead of the RBA meeting scheduled for Tuesday, with Barclays' analysts advising to sell.
The aussie edged up 0.03%, trading at $0.7846 against the greenback after a patchy trading session.
Many analysts have been warning that the AUD/USD pair is likely to decline in the short term.
"In another week dominated by monetary policy, we expect a 25bp rate cut by the Reserve Bank of Australia (RBA), in part prompted by the recent strength in the AUD. As only about a 50% chance of a cut is priced in by the rates market, the AUD looks vulnerable," BNP Paribas said in a research note.
"Overnight, news from China (a key trading partner) was not encouraging: its manufacturing PMI was confirmed to have dropped further into contraction territory (to 48.9 from 49.2)," BNP Paribas added.
In response to the Chinese manufacturing index hitting a one-year low in April, the aussie opened with a slight gap down on Monday.
ANZ Research adopted a similar stance in its research on Monday: "The RBA are expected to cut rates and downgrade the growth forecast, and that should weigh on the AUD.”
Moreover, Barclays' analysts warned in a note to clients: "An under-priced RBA rate cut and strong US labor market report should push AUD/USD lower this week…We narrowly expect the RBA to cut rates by 25 basis points to a new record low of 2.00%."
Later in the week, traders are also monitoring the releases of trade balance, unemployment rate, and retail sales reports as well as the RBA’s monetary policy statement.
Australia's March data showed job growth of 37,700, beating most estimates by some margin. And while inflation is currently weak, the RBA's preferred adjusted CPI measures - the trimmed mean CPI and the CPI excluding volatile items - were both well within the bank's 2-3% target range last quarter at 2.3% each.
Meanwhile, Monday’s US data revealed that the flow of new work to factories rebounded 2.1% in March, after declining for over a half year. But key components still pointed to weak investment.
Australia central bank cuts rates to record-low 2.0 pct
Australia's central bank cut its cash rate a quarter point to an all-time low of 2.0 percent on Tuesday, aiming to spur a sluggish domestic economy while keeping downward pressure on the local dollar.
The Reserve Bank of Australia (RBA) made the announcement following its monthly policy meeting. A Reuters poll of 27 analysts had found 20 expected a cut this week.
AUD/USD: Aussie Tops $0.80 as ADP Fails, Oz Labor Market Eyed
The Australian dollar was strongly higher against its US namesake on Wednesday, after the greenback was punched by a below-expected ADP employment change, while traders now heed the Australian labor market, with economists forecasting a small uptick in the jobless rate last month.
The aussie galloped 1.07% to $0.8025, after the pair started at $0.7939, with the intraday low residing at $0.7916.
ADP published its labor market update in April, showing that 169,000 new jobs were created in the US private sector, missing the expectation of a moderate hike of 200,000 new jobs. Moreover, the previous month's reading was downwardly revised to 175,000 from a figure of 189,000 seen originally.
The Australian unemployment rate is expected to have rebounded to 6.2% in April, after briefly slipping to 6.1% in March. Net job growth is forecast to ease to just 4,000 last month, from the unexpectedly high 37,700 seen in March.
On Tuesday, the RBA decided to cut the cash rate by 25 basis points to a record low 2%, in efforts to support demand in the investment-drained economy, which also boosted the aussie.
"The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices," RBA Governor Glenn Stevens said in a statement.
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Economic data due from Australia - its jobs day!
April employment data is due from Australia today
At 0130GMT
Employment Change:
Unemployment Rate:
Full Time Employment Change,
Part Time Employment Change,
Participation Rate, expected is 64.8%,
The AUD is benefitting from this latest USD weakness, as well as a perception (correct IMO) that the RBA is now done (for at least, say, 6 months, barring any systemic shock). The RBA will adopt an easing bias on Friday in the SOMP (I'll have more on this), but the question is, who'll believe them? They're done for now. If it's a weak employment number I suspect we'll see some trader selling but longer time-frame players will be there on bids a little lower. I haven't got levels as yet for the day, but above 0.8 should cap for now. I suspect the AUD/USD will be rangey with a bias to up until US data shows signs of improving and talk of Fed lift-off rekindles.
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AUD/USD: Aussie Tops $0.80 as RBA Keeps Neutral Tone After Rate Cut
The Australian dollar was boosted throughout the week and broke above the psychological resistance of $0.80, as the country's central bank cut its cash rate further but at the same time gave hints that no further monetary policy easing will occur in the months ahead.
The Australian dollar was on an upward trajectory over the week and resisted a weaker flow of macroeconomic fundamentals, as the Australian central bank decided to implement a further cut in its borrowing costs in efforts to support demand in the investment-drained economy, but gave no indication of further monetary policy easing in the following months.
On Tuesday the Reserve Bank of Australia (RBA) cut its interest rates as widely expected, while it made no indication that it intends to ease policy further.
The RBA slashed the benchmark cash rate by 25 basis-points to 2.00% in efforts to support demand, while the high Australian dollar continues to impede growth in the transitioning economy.
"The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices," RBA Governor Glenn Stevens said in a statement on Tuesday.
Following the rate cut, the Australian currency declined but it consequently reversed sharp losses and turned to gains, settling at the $0.79 level.
The rising trend of the Australian dollar was also supported by the broad weakness of its US counterpart after disappointing trade data from the US revealed a sudden spike in the American trade deficit.
On Thursday the so-called aussie took a breather and slid below the $0.80 handle but still traded with mild gains following the disappointing labor-market figures.
Unemployment in Australia rebounded to 6.2% in April, according to data out on Thursday, after briefly swinging down to 6.1% in March.
While analysts had widely expected the jobless rate to reach 6.2% again, job growth came in well below forecasts, with the data showing a net 2,900 jobs lost last month. The market forecast was for 4,000 jobs to be added to the economy in April.
According to the release, some 21,900 full-time positions were lost, while part-time jobs rose by 19,000 last month.
The Australian currency was in a bearish mode as the most important piece of labor data in the US, the non-farm payroll report was awaited. On Thursday the currency sunk roughly 100 pips from earlier highs.
On Friday the aussie slid below the $0.79 level but the decline proved to be short-lived. The main reason was the release of the RBA's Monetary Policy Statement that revealed the central bank sees the currency overvalued, continuing to restrict the economy's transition out of the mining-boom era, which explains the bank's interest rates cut on Tuesday.
The highly awaited non-farm payroll report from the US on Friday showed 223,000 people were added to the workforce in April, slightly below the expected 228,000 and well above March's paltry 85,000 offering. The unemployment rate came out at 5.4% as predicted, falling from the previous 5.5%.
Following the release, the Australian currency maintained gains and traded above the $0.79 threshold.
Over the week the Australian dollar advanced 1.03% to $0.7933.
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