AUD/USD news - page 20
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AUD/USD forecast for the week of June 15, 2015
The AUD/USD pair rose during the course of the week, but as you can see we are well within consolidation. Because of that, we don’t really have much in the way of a longer-term trade at the moment but we are paying attention to the Australian dollar in general. The gold markets of been relatively flat, so that of course has not been helping the trade ability of this particular market. With this, we believe that the market is one that you should probably be on the sidelines as far as longer-term trades are concerned.
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Aussie Unchanged After RBA Kent's Speech, Minutes Awaited
The aussie was little changed on Monday following a speech from Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent, while traders wait for the central bank's minutes and the Federal Open Market Committee (FOMC) meeting later on Tuesday.
The aussie was flat at $0.7720 versus the US dollar on Monday, making only minor moves after the pair rose 1.5% last week.
Christopher Kent said in his speech on Monday that monetary policy remains effective, while further weakness in Australia's currency is "likely and necessary" to support demand for domestic production.
"I'd note though that a further rise in the growth rate of household expenditure should contribute, in time, to a pick-up in non-mining business investment. So too would a further depreciation of the exchange rate, which would raise the demand for domestic production," Kent pointed out.
"We have argued that a further exchange rate depreciation appears likely and necessary, particularly given the large declines in commodity prices this year," he added.
The US dollar will be the main focus of the week, with the FOMC meeting outcome on Wednesday.Markets still expect that the Federal Reserve (Fed) will be hawkish, while at the same time the RBA maintains its dovish stance.
"While the to and fro from events between Brussels and Athens continues to weigh on sentiment, events in the UK as well as the US are also set to be in focus this week with the latest FOMC rate meeting also on investor’s radars, while the pound shrugged off a ratings agency outlook downgrade by Standard and Poor’s of the UK’s credit rating, to a negative outlook," Michael Hewson, chief market analyst at CMC Markets UK wrote in a note on Monday.
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AUD/USD: Aussie Keeps Gains Ahead of RBA Minutes
Traders remained focused on the Reserve Bank of Australia (RBA) minutes and the start of the Federal Reserve (Fed) meeting on Tuesday, with AUD/USD trading near daily highs.
The aussie was up 0.43% trading at $0.7764 against the greenback, after hitting the intraday high of $0.7776.
"The Australian dollar has been the best performer today, though that is probably as a result of some position squaring ahead of the release early tomorrow of the latest minutes from the most recent RBA meeting," chief analyst at CMC Markets Michael Hewson said in a note.
"There was some confusion about the central banks message earlier this month when they left rates unchanged but gave no guidance on its next likely move. The option was left open to further easing but the timing was rather open ended.”
RBA minutes
Traders are closely eyeing the release of the RBA’s meeting minutes early on Tuesday.
"While domestic data are absent this week, the RBA is delivering a number of speeches, minutes and analysis. Speeches by Assistant Governors Kent and Debelle today and tomorrow, and the release of the RBA’s Minutes from the June meeting tomorrow, will all be watched for insights into the policy outlook," ANZ Bank economist, Daniel Gradwell, said in a research note.
Earlier in the session, the currency market largely ignored a speech from RBA Assistant Governor Christopher Kent, who pointed out that monetary policy remains effective, while stressing that further weakness in Australia's currency is "likely and necessary."
"I'd note though that a further rise in the growth rate of household expenditure should contribute, in time, to a pick-up in non-mining business investment. So too would a further depreciation of the exchange rate, which would raise the demand for domestic production," Kent said. "We have argued that a further exchange rate depreciation appears likely and necessary, particularly given the large declines in commodity prices this year."
FOMC meeting
The two-day Federal Open Market Committee (FOMC) meeting, which begins on Tuesday, remains the most important event of the week, with analysts expecting to see great volatility in the currency markets on Wednesday.
The Fed is unlikely to hike rates at the meeting, with a majority of economists projecting a lift-off in September. Traders will monitor the tone of the statement closely.
"This meeting a set up meeting for future rate hikes. We are looking for September as the most probable starting point. The focus will be on the ‘dot plot’ and Fed Chair Janet Yellen’s press conference," senior Canada macro strategist at TD Securities, Mazen Issa, told WBP Online.
In terms of US data released on Monday, May's Empire State manufacturing survey from New York disappointed, coming in at minus 1.98 in June, following the 3.09 a month ago. Also, American industrial production fell 0.2% month-on-month in May, following the 0.5% downturn seen in April.
On the other hand, the American housing market index (HMI) rose to 59 points in June, compared to the 56 points markets had been expecting, the National Association of Home Builders (NAHB) said on Monday.
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AUD/USD: Aussie Edges Higher, Trend Unclear
The aussie managed to recover from earlier losses amid less than encouraging US macro figures. Trading will be cautious ahead of Wednesday's Federal Open Market Committee's meeting conclusion. The pair was seen around $0.7760, unchanged on the day, while touching a daily low of $0.7720 earlier in the session.
The number of housing starts in the US fell 11.1% to 1.036 million in the month of May, while building permits surged 11.8% to 1.275 million units.
"This was a much weaker performance than the 4% decline expected by the market, and it come on the heals of the upwardly revised 22% m/m gain in building activity (previously reported as +20% m/m) the month before. The decline was in both single-family (down 5.4% m/m) and multi-family (down 20% m/m) construction,"according to Millan L.B. Mulraine, US Strategist at TD Securities.
Attention is also being paid to Wednesday's Federal Open Market Committee (FOMC) meeting conclusion. The Fed is unlikely to hike rates at this week's meeting, although there is still a slight possibility for the central bank to move rates. Lift-off is more likely to happen at September's meeting.
Moreover, in the latestRBA minutescentral bank policymakers said that the economy is still being held back by the strength of the Australian dollar.
"The exchange rate was close to the lowest levels seen earlier in the year, but members noted that the current level of the exchange rate, particularly on a trade-weighted basis, continued to offer less assistance than would normally be expected in achieving balanced growth in the economy," according to the minutes. "A further depreciation therefore seemed both likely and necessary, particularly given the significant declines in commodity prices over the past year."
According to CFTC and Rabobank, AUD positions moved further into negative territory on doubts about the recent consensus view that the RBA’s easing cycle may be over, while USD longs have now increased for two weeks running on the back of an improvement in US data releases, having fallen for six consecutive weeks. Going forward, the tone of the June 16-17 FOMC meeting could be a key influence.
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AUD/USD: Aussie Turns Lower, USD Sentiment Dominates
The aussie consolidated on the downside during the last trading day of the week, correcting the previous session's gains. Trading is expected to be very light today due to no data releases on the domestic front, while foreign economies also offer very few weighty fundamentals.
The AUD/USD fell 0.29% to $0.7772 ahead of the European session. The aussie is poised to finish the week with small gains, where most of the sentiment is USD driven.
The aussie fell from $0.7750 down to $0.7650 pre-FOMC, then back to $0.7750 following the dovish Fed, and then a further rally overnight, touching $0.7850 on the back of a weaker US CPI, before settling at $0.7800 as the US Philadelphia Fed outperformed.
US data came mixed in the previous session, with the US CPI missing forecasts and dragging the dollar lower, while an upbeat Philadelphia Fed survey reversed the losses.
US headline CPI data recorded a 0.4% month-to-month rise compared to a 0.5% market consensus in May, while the core component also undershot market expectations, gaining 0.1% versus expectations of 0.2%. The headline number was boosted by a sharp rise in gasoline prices.
"The impacts of the stronger USD and earlier decline in oil prices are being nullified by reduced spare capacity in the economy," ANZ wrote in research note on Friday.
The headline activity index in the US Philadelphia Fed survey increased to 15.2 in June from 6.7 in May, while markets were expecting only 8.0. While the details of the survey were mixed, the strong headline number suggests that manufacturing activity might be picking up.
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AUD/USD forecast for the week of June 22, 2015
The AUD/USD pair went back and forth during the course of the week, and as a result the market looks very choppy. We have no interest in placing longer-term trades in this marketplace, and as a result we are on the sidelines. If we can break above the 0.80 level, we feel that the trend will have changed to the upside, but really at this point time we don’t think it’s going to happen. We should also point out that a move below the 0.75 level would be massively bearish, and of course have us selling.
AUD/USD: Trading the HSBC Chinese Flash Manufacturing PMI
HSBC Chinese Flash Manufacturing PMI (Purchasing Managers’ Index) is based on a survey of purchasing managers in the manufacturing sector. Respondents are surveyed for their view of the economy and business conditions in China. A reading which is higher than the market forecast is bullish for the Australian dollar.
Here are all the details, and 5 possible outcomes for AUD/USD.
Published on Tuesday at 1:45 GMT.
Indicator Background
Traders should pay close attention to this key release, as China is Australia’s number one trading partner, and an unexpected reading can quickly affect the direction of AUD/USD.
For most of 2015, the index has been below the 50-point level, which separates contraction from expansion. The index showed little movement in May, coming in at 49.1 points. The estimate for the June estimate stands at 49.4 points.
Sentiments and levels
US numbers have been a mix in recent weeks, although Q2 numbers could still end up improving over a dismal Q1. The US economy continues to outperform that of Australia, but the lack of confidence from Yellen could weigh on the greenback. So, the overall sentiment is neutral on AUD/USD towards this release.
Technical levels, from top to bottom: 0.7978, 0.7901, 0.7798, 0.7692, 0.7601 and 0.7528.
5 Scenarios
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AUD/USD: Pair Dives in Red After US GDP
The Australian dollar fell in red versus the greenback on Wednesday, after thelatest revisions to the US GDP in the first three months of the year revealed stronger household consumption and higher income.
The aussie was lost 0.51% to $0.7693 against the US dollar on Wednesday, trading off its intraday high of $0.7771.
GDP in the world's biggest economy contracted 0.2% in the first quarter of 2015, slowing from the downwardly revised -0.7% in the second estimate, the US Bureau of Economic Analysis advised on Wednesday.
The most important part of the economy, households also received the biggest upgrade on Wednesday. Consumers spent 2.1% more in the first quarter than three months earlier compared to an increase of 1.8% that had been reported previously. As a result of this revision, the GDP growth rate got a boost of 20 basis points.
In the previous session, Federal Open Market Committee voting member Jerome Powell said the US dollar is well supported because the US economy is strong, also indicating an interest rate hike as soon as September, which strengthened the greenback further, although it failed to hold gains.
"If those things are realized, I feel that it is time, it will be time, potentially as soon as September," Powell said. "I don’t think the odds are 100%. I think they’re probably in the 50-50 range that we will realize those conditions, but that’s my forecast."
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AUD/USD forecast for the week of June 29
The AUD/USD pair fell during the course of the week, testing the 0.7650 region. This is an area that begins pretty significant support, so we don’t necessarily have a trading signal here. If we were to break down below the 0.75 level, we might be sellers, but we certainly wouldn’t be buyers anywhere. After all, the Australian dollar looks very soft against most currencies, and the US dollar of course will be any different. With that being said, we are very bearish looking to sell rallies and breakdowns but in the meantime are on the sidelines
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Economic data due from Australia (and ... guess who's coming to dinner?)
Data due from Australia today (I'll get to the dinner invitation in a moment)
2330GMT - ANZ Roy Morgan Weekly Consumer confidence (week ended June 28), prior was 114.0
0100GMT - HIA (that'd be the Housing Industry of Australia) New Home Sales for May
prior was +0.6% m/m
0130GMT - Private Sector Credit for May
The private sector credit will be the focus, but it isn't usually much of an FX market-mover. Included with this data is the 'business' and 'housing' credit data, which will also be looked at. I don't have 'expected' points for this, but the priors (for April) were:
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Due at 0840GMT (June 30), and our dinner guest (well, dinner time for me, anyway), Reserve Bank of Australia Governor Stevens speaks in London at a function hosted by the Official Monetary and Financial Institutions Forum (OMFIF), London. The topic is The Changing Landscape of Central Banking.
Stevens' speech comes in the hours leading up to the 'blackout' period before a board meeting. The next meeting is on Tuesday (July 7). RBA staff are not to speak to the media during the blackout. It begins on Wednesday afternoon (when the RBA's internal Policy Discussion Group, this is where RBA staff recommendations to the board are formulated).
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