AUD/USD news - page 18
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AUD/USD forecast for the week of May 18, 2015
The AUD/USD pair tried to break out during the course of the week, and did actually close above the 0.80 handle. This is reason enough to start going long in our opinion, as we believe the market will ultimately continue to go much higher. The fact that we cleared the 0.80 level is a very positive sign, and we do recognize that breaking the top of the previous week’s shooting star as well as the one before that is a very strong sign also. In fact, this looks a lot like the British pound, and we think that the Australian dollar is heading towards the 0.85 handle.
RBA Deputy Governor Lowe speaking early Monday in Sydney
Reserve Bank of Australia Deputy Governor Philip Lowe speaks at the Corporate Finance Forum in Sydney.
I don't have a topic for the speech as yet.
Just a heads up for AUD traders at the week's opening.
CBA issue revised forecasts for AUD/USD
Commonwealth Bank of Australia currency strategists have revised their forecasts for the AUD/USD:
AUD/USD: Aussie Declines Towards $0.80 on Lowe's Comments
The Australian dollar traded lower as commodity prices weakened, despite disappointing US data driving the greenback lower against some other crosses.
There was no significant domestic data releases during Monday's session but market participants digested a speech from Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe at a Corporate Finance Forum in Sydney.
The aussie declined further towards the $0.80 handle on Monday, down 0.10% at $0.8022 towards the end of Asian trading. "While fundamentals have improved incrementally, the extent of the current move is without basis," ANZ wrote on Monday in a research note.
The RBA's last monetary meeting minutes are due on Tuesday. More broadly, global preliminary PMIs will reveal whether there is any broadening trend in global growth to offset the continued weakness in the US.Friday saw the US dollar under pressure as May data continued to disappoint.
It has been no secret that the RBA wants to see the Australian dollar fall in order to support domestic producers, however there appears to be factors outside of the bank's control which would help this occur.
"The large monetary expansion abroad and low interest rates of the major central banks have meant that the value of the Australian dollar has been higher than would otherwise have been the case," RBA Deputy Governor Philip Lowe said in a speech on Monday.
"In this context, it is difficult to escape the conclusion that a further depreciation of the Australian dollar would be helpful in the transition of the Australian economy," he added.
Australia's transition out of the mining boom is expected to be driven by a pick up in investment outside the mining sector and growth in household demand, which will be helped by the RBA's looser monetary-policy settings.
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RBA Doesn't Rule Out Further Rate Cuts; Aussie Drops
The Reserve Bank of Australia (RBA) pointed to a weaker economic growth and inflation outlook as the main driver behind the bank's decision to ease monetary policy in May, however despite making no indication of future policy moves on May 5, today's minutes release suggest that the bank is not ruling more rate cuts out.
The RBA has lowered the cash rate twice so far this year, once in February and again in May, bringing the cash rate to a record-low 2%.
"Members agreed that, as at the time of the reduction in the cash rate in February, the statement communicating the decision would not contain any guidance on the future path of monetary policy. Members did not see this as limiting the Board's scope for any action that might be appropriate at future meetings," according to the May 5 meeting minutes.
The Australian dollar dropped 30 pips to $0.7955 on Tuesday after the minutes were released, from $0.7987 beforehand.
In the minutes the RBA expressed a similar sentiment about the strength of the Australian dollar than it did in the cash-rate release two weeks ago, saying it was both necessary and likely that it would depreciate further.
"... such an outcome would help to achieve more balanced growth in the economy and assist with the transition to a lower terms of trade," the minutes read.
The RBA's biggest challenge right now is steering the economy through one of its biggest transition periods in light of the large drop in resource investment over the past few years.
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Economic data due from Australia today (and an RBA speaker first)
Reserve Bank of Australia Deputy Governor Lowe is speaking at 2315GMTDue then at 0030GMT:
AUD/USD: Aussie Stabilizes on Positive Consumer Data
The Australian dollar has lost more than 3% over the last four sessions, as the currency market is led by the US dollar. However, forecast beating Australian consumer figures overnight helped to stabilize the aussie somewhat.
The buck strengthened again on Tuesday following much stronger than expected housing starts data for April, and the Federal Open Market Committee minutes released later today are expected to provide further power for dollar bulls.
The aussie remained trading within a tight range during the Asian session, keeping small gains, up 0.14% at $0.7923.
Minutes from the Reserve Bank of Australia (RBA) released on Tuesday "kept the door to further easing slightly more ajar than the market expected and drove some early under-performance in the AUD. With a slightly stronger USD trend in train last night this meant the AUD fell back to month lows. Signs of strength in the US CPI later this week will likely extend this sell-off," ANZ wrote in a research note on Wednesday.
The Australian consumer confidence gauge rebounded into optimistic territory in May after the central bank attempted to support demand by cutting interest rates for the second time this year.
The Westpac-Melbourne Institute Consumer Sentiment Index jumped 6.4% to a 16-month high of 102.4 in May from 96.2 in April, where a figure below 100 signals the majority of consumers are pessimistic, while a reading above 100 indicates a majority of optimists.
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AUD/USD: Aussie Returns to Post-FOMC Minutes Highs
The Australian dollar tested $0.79 during the overnight session, rising to post-FOMC minutes levels.
The takeaway from the FOMC’s April minutes is that a June rate hike is off the table. However, the detailed discussion beforehand shows a deeply divided FOMC that doesn’t seem to agree on the most basic precepts of what it is looking at or what it should be doing next.
Eric Green from TD securities described the key takeaway as "the USD will persist as a headwind for a time, inflation will move back towards target, and risks around the outlook are nearly balanced."
The aussie added 0.46% and jumped back above $0.79, trading at $0.7908, as the best performer during the Asian session.
AUD received a little boost from China's HSBC flash manufacturing PMI. The index rebounded to 49.1 this month, according to the flash reading, up from April’s 12-month low of 48.9. The data was not as good as markets were anticipating, but the uptick should nonetheless diminish growth concerns that have come to a head in recent weeks following a set of much weaker-than-expected data.
"On the one hand, it suggests that while downward pressure has eased somewhat headwinds to growth remain," Capital Economics commented on the release.
Later in the US session, markets will focus US initial jobless claims, which have been at incredible lows recently, the Philly Fed survey and existing home sales. The US session will also offer speeches by the Fed’s Williams and Fischer.
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AUD/USD forecast for the week of May 25, 2015
The AUD/USD pairfell hard during the course of the sessions that made up the past week, as the 0.80 level continues to look massively resistive. Because of this, it appears that the US dollar is going to try to strengthen, but we need to get below the 0.78 level in order to feel comfortable enough to start shorting. At that point in time we would anticipate this market heading back towards the 0.75 level again. Nonetheless though, there isn’t a whole lot of room to move, so shorter-term traders will probably be the ones trading this market.
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AUD/USD Forecast May 25-29
The AUD/USD reversed directions last week, losing 150 points. AUD/USD closed the week at 07893. There are only 5 events this week. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
US housing numbers were mixed and manufacturing numbers slipped, but the FOMC minutes were optimistic in tone, as policymakers remain confident that Q2 will outperform a disappointing Q2. The RBA minutes indicated that policymakers were open to further easing, which hurt the Australian dollar.
* All times are GMT.