AUD/USD news - page 26
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AUD/USD: Aussie Brings Home Biggest Weekly Gain in Almost 2 Yrs
The Australian dollar strongly appreciated against its US namesake over the past week, pulling itself off the recent 6 1/2-year lows as the 'land of Oz' showed some encouraging macro and markets postponed their forecast of the next rate cut well into the next year. Meanwhile, a surge in global stocks and a recovery in risk appetite - induced by soothing comments from China's PM - also supported a rally in commodity currencies across the globe.
The so-called aussie added 2.40% against the greenback and ended Friday at $0.7091. Exactly seven days ago, it was seen at $0.6908. That was the biggest weekly jump in about twenty months.
Still, it was down more than 22% year-to-date.
The AUD/USD pair reached its weekly low of $0.6896 on Monday - a low not seen since early 2009 - and a weekly high of $0.7100 on Thursday, a 9-day high, following a solid jobs report.
Week wrap-up
As for the daily performance, the aussie was rising during nearly every session of the week - it ended Monday and Tuesday 0.17% and 1.28% higher, respectively. It was supported by Monday's upbeat ANZ job advertisements and Tuesday's NAB business conditions that came in better than expected, despite a separate gauge of business confidence failing to meet estimates.
However, Wednesday brought a sharp decline of 1.05%. The aussie came under severe selling pressure, falling in sympathy with the kiwi, anticipating a rate cut, dovish monetary policy statement and series of economic forecast downgrades from the Reserve Bank of New Zealand (RNBZ) after its September meeting.
Also potentially damaging the aussie, Standard & Poor's stripped Brazil of its investment-grade credit rating late on Wednesday, while keeping the outlook negative. Because the Brazilian real hardly trades in the Asian time zone, some investors tend to get rid of the aussie for hedging as the two currencies share a close link to commodities and high yields.
The slide continued even early on Thursday, as the RNBZ decision came overnight. Still, it managed to strongly recover later in the day and finished soaring 1.59%. The aussie found some fans after employment figures at home came in stronger than expected. Adding to that, a rally in yuan also supported the trend as the aussie is often used as a liquid proxy for China plays.
On Friday, the AUD/USD par closed 0.28% higher, with no real drivers.
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AUD/USD Forecast Sep. 14-18
AUD/USD saw its fate change and enjoyed a nice recovery, owing mostly to domestic strength and dollar weakness. The release of the RBA meeting minutes is the main event. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
Despite worse than expected Chinese data, markets managed to stabilize and this certainly helped the Aussie rebound after the big plunge. At home, the Aussie enjoyed better than expected jobs numbers. In the US, the weak consumer sentiment weighed on the greenback ahead of the big Fed meeting.
* All times are GMT.
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AUD/USD: Aussie Trades Elevated, Breaches $0.71
The AUD/USD pair was seen slightly higher on Monday, changing hands above the $0.71 handle and with further upside possible in the coming days.
Data at the weekend showed industrial production in China in August ticked higher from 6.0% to 6.1% on a yearly basis, but missed the forecast of 6.5%. Moreover, retail sales for August in China improved from 10.5% to 10.8% year-on-year.
The Australian dollar was not influenced by these numbers and continued to test the $0.7120 resistance in the Asian session, which it managed to breach, but failed to hold and dipped back below.
"What was more concerning was the fall in fixed asset investment to 10.9%, below last month’s 11.2%, and it is this along with a weak manufacturing sector that suggests that the wish of the Chinese government hitting its 7% growth target is likely to be the product of wishful thinking, unless data improves substantially between now and year end," Michael Hewson, chief market analyst at CMC Markets UK, wrote on Monday.
Traders are anxiously waiting for Thursday's monetary policy decision, but the Federal Reserve (Fed) is not expected to raise rates, according to the latest data from the Fed funds futures. The action will likely come later in the year, most likely in December.
The technical outlook is bullish, but traders should wait for a small drop to buy the pair at a better price, due to overbought conditions.
On Thursday, a well performing Australian labor market in August saw 17,400 people added to the workforce, much more than the initially expected 5,000. What's more, the unemployment rate declined to 6.2% from last month's 6.3%, providing some relief for the aussie.
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AUD/USD: Aussie Extends Gains on Dovish FOMC Bets
The AUD/USD pair was seen higher on Monday, changing hands above the $0.71 handle and with further upside possible in the coming days.
Data at the weekend showed industrial production in China in August ticked higher from 6.0% to 6.1% on a yearly basis, but missed the forecast of 6.5%. Moreover, retail sales for August in China improved from 10.5% to 10.8% year-on-year.
The Australian dollar was not influenced by these numbers and continued to test the $0.7120 resistance in the Asian session, which it managed to breach, but failed to hold and dipped back below.
"What was more concerning was the fall in fixed asset investment to 10.9%, below last month’s 11.2%, and it is this along with a weak manufacturing sector that suggests that the wish of the Chinese government hitting its 7% growth target is likely to be the product of wishful thinking, unless data improves substantially between now and year end," Michael Hewson, chief market analyst at CMC Markets UK, wrote on Monday.
Traders are anxiously waiting for Thursday's monetary policy decision, but the Federal Reserve (Fed) is not expected to raise rates, according to the latest data from the Fed funds futures. The action will likely come later in the year, most likely in December.
The technical outlook is bullish, but traders should wait for a small drop to buy the pair at a better price, due to overbought conditions.
On Thursday, a well performing Australian labor market in August saw 17,400 people added to the workforce, much more than the initially expected 5,000. What's more, the unemployment rate declined to 6.2% from last month's 6.3%, providing some relief for the aussie.
source
Aussie weaker after RBA minutes discuss impact of China slowdown
The Aussie gave up early gains Tuesday after minutes from the September monetary policy board meeting showed concern over the impact on domestic growth of the economic slowdown in China.
"Members noted that the Chinese authorities had for some time been selling foreign exchange reserves to prevent the RMB from depreciating against the US dollar in the face of significant capital outflows," the RBA minutes said.
"This contrasted with the experience in the previous decade, during which foreign reserves had been accumulated to limit the appreciation of the RMB in the face of capital inflows. Members noted that it was not clear which assets the Chinese authorities had sold as part of the recent intervention nor which assets were being bought by those taking capital out of China, but given the potential size of these flows, their effects on asset markets could be large."
AUD/USD traded at 0.7133, down 0.06%, after the minutes, while USD/JPY changed hands at 120.47, up 0.19%.
The Bank of Japan holds its monetary policy meeting with a statement due around 1230 Tokyo time (0330 GMT). There is growing concern among some board members Japan's economy may deviate downwardly from the bank's baseline recovery scenario, but the nine-member board is still likely to stand pat on monetary policy. Following that, BoJ Governor Haruhiko Kuroda holds a news conference at 1530 (0630 GMT) to explain the board's decision.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.07% at 95.45.
Overnight, the dollar held gains against against the other major currencies in thin trade on Monday, as investors remained focused on the Federal Reserve's upcoming policy statement on Thursday.
Sentiment on the greenback remained vulnerable amid concerns that mixed U.S. economic reports and recent volatility in global financial markets will prompt the U.S. central bank to refrain from hiking interest rates on Thursday.
Data on Friday showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to 85.7 from 91.9 in July, compared to forecasts of 91.2.
Separately, the Labor Department reported that the producer price index was flat last month after a 0.2% increase in July.
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AUD/USD Forecast Sep. 21-25
AUD/USD enjoyed another strong week, as the pair gained close to 100 points and ended the week just below the 0.72 line. There are just three events in the upcoming week. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
In the US, the Fed refrained from raising the rates and seemed concerned about the global economy. The Aussie took advantage with strong gains. There were no major Australian releases last week.
Updates:
* All times are GMT.
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AUD: Focus On China Data; NZD: Not A Buy - Credit Agricole
In the aftermath of the Fed meeting risk sentiment and the trend in the USD will remain dominating the forces for AUD. The strong inverse correlation between AUD and risk market stress shows that AUD price action has largely coincided with global risk appetite, rising when the mood improves and vice versa.
While the Fed has played a role in this, China is also an important factor at play here. In this regard many observers are keen to watch the release of China’s September Manufacturing PMI release – reported early in the week. Recall, last month the Caixin (formerly HSBC) PMI index slipped to a low of 47.3. This reflects the broad-based slowdown in China with recent easing measures doing little to shore-up growth. Also worth noting are the recent port explosion and efforts to reduce pollution ahead of the Victory Day celebration. Even so, an average of the official and Caixin PMIs shows that the economy continues to decelerate with the index tracking below 50 for the last five months.
Despite the China effect, we think the bar to further RBA easing is high given lower potential growth. By the same token, the recent government reshuffles indicate scope for fiscal support, offering some relief to the RBA.
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AUD/USD: Aussie Swings Lower, Drops To Daily Lows
The US dollar was seen higher during midday trading on Tuesday and erased earlier losses, with the AUD/USD pair now trading at fresh daily lows around $0.7115.
A number of Federal Reserve (Fed) policymakers have been articulating their view that a rate rise this year will still happen, and that for now caution is required given the volatility seen in recent weeks.
"The US dollar is deriving support from comments by Fed officials which are keeping alive expectations that they will begin to raise interest rates this year. Atlanta Fed President Lockhart stated overnight that while recent market volatility has raised risks to the US economic and inflation outlook, he remains confident that they will begin to raise interest rates this year," analysts at Bank of Tokyo-Mitsubishi wrote on Tuesday.
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ABN Amro lowers AUD forecasts, sees November RBA cut
Outlook darkens for the Australian dollar
Economists at ABN Amro say weak business investment spending and slower China economic growth led them to lower AUD/USD forecasts and they've abandoned 2016 RBA hike forecasts.
They now see AUD/USD calling to 0.6800 this year form a previous projection of 0.7000. In 2016, they see the Australian dollar falling to 0.6000 from 0.6400.
ABN Amro analysts also note that a November rate cut isn't fully priced into the market and say the RBA will stay lower for longer.
"We now think that the RBA is likely to keep monetary policy loose for the rest of 2016, compared to our previous expectations of 50bp rate hike in the second half of 2016," they write in a note today.
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AUD/USD forecast for the week of September 28, 2015
The AUD/USD pair fell during the course of the week, slicing below the 0.70 level. However, the market found quite a bit of support below there, as we bounced back above that handle. With that being the case, it looks like the market is not ready to break down significantly yet, but we must certainly have a resistive candle from the previous week. With that being the case, we believe that this is a market that you will have to trade the range via shorter-term charts, and therefore we have no interest in trading long-term positions.
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