AUD/USD news - page 14
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Aussie Rockets After RBA Keeps Rate on Hold
The Australian dollar jumped 100 pips on Tuesday following the Reserve Bank of Australia's (RBA) decision to keep the cash rate unchanged at 2.25%.
Before the announcement the aussie erased most of it's overnight gains and was hovering under $0.76, but straight after the decision it jumped 100 pips, rocketing 1.14% to $0.7673.
The RBA left the cash rate on hold at 2.25% on Tuesday but paved the way for future policy easing as the economy continues to suffer from post mining-boom blues.
According to the bank's policy statement, further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target.
"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 likely, particularly given the significant declines in key commodity prices," RBA Governor Glenn Stevens said in a statement on Tuesday.
"A lower exchange rate is likely to be needed to achieve balanced growth in the economy," he added.
Technical analysis
As the aussie booked a false breakout below the important support level of $0.7560, lots of traders were caught and liquidated their short positions which has fueled the spike in prices.
After the emotional reaction volatility calmed down during the Monday, traders take a rest and the attack of the current swing high of $0.77 began again.
As AUD/USD is now rebounding from the swing low of $0.7530 and technical oscillators on longer timeframes are still oversold, we are expecting some kind of rebound and break above $0.77 which worked as a resistance on Friday, after non-farm payrolls.
Here Are the Suspicious Moves in the Australian Dollar That Set Off an Investigation
The Australian dollar is up today after the Reserve Bank of Australia announced interest rates would remain unchanged, surprising most traders who were expecting a cut. However, regulators noticed that the spike actually began before the announcement was officially released. Even more bizarre, it's the third month in a row that the aussie has made a sharp move just moments before a monetary policy decision was made public.
As you can see of this chart of the minute before and after the 2:30 p.m. local release (22:30 U.S. Eastern Time) on February 3, the Australian Dollar Spot fell about 0.6 percent in the final seconds before the announcement was made.
On March 3, it jumped 0.6 percent:
And today, it was a 0.7 percent climb:
Securities regulators in Australia say they will investigate the situation to see why this keeps happening. However, the fact that the moves happened right before the announcement doesn't necessarily mean someone is getting the information early. Sean Keane, an Auckland-based analyst at Triple T Consulting, told Bloomberg News that a lack of liquidity in the moments leading up to the news release could be distorting the algorithms of some high frequency traders. With no buyers in those final few seconds before 2:30 p.m., the algorithm keeps amping up the price until it finds a match.
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AUD/USD: Post-RBA Party Over; Gains Wiped Out
The Australian dollar struggled to keep a hold of gains which proceeded the Reserve Bank of Australia (RBA) rate statement on Tuesday, which surprisingly saw the bank remain on hold, contrary to popular belief that the bank would cut interest rates for the second time this year.
The AUD/USD pair traded at $0.7638 on Wednesday morning in Sydney, only little higher than $0.7600 where it sat before the RBA's decision, almost wiping out its more than 1.6% gain which had the cross rate as high as $0.7710 after the decision on Tuesday.
Ahead of the bank's decision markets had priced in a high probability of the bank cutting the cash rate by 25 basis points to 2.00% - a would-be new record low.
However, the RBA Board judged that it was appropriate to hold interest rates steady for the time being, according to the statement. "Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target," the statement read, in unchanged language from its March statement.
The big jump in the Australian dollar was likely also a result of the RBA changing its sentiment on the currency. Instead of mentioning that it was still fundamentally overvalued, the board simply said that it was likely to drop further, "particularly given the significant declines in key commodity prices."
BNZ currency strategist Raiko Shareef said on Wednesday that it was testament to the overwhelming desire to own US dollars overnight that Australian dollar had since given up nearly two-thirds of its gain.
US data was broadly positive on Tuesday, with job openings almost at a new record in February, and consumer sentiment hitting a new post-GFC high.
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AUD/USD: Exhausted Aussie Sinks Amid Pro-Dollar Sentiment
The aussie lost power in the US trading session on Thursday in the battle for $0.77, as the greenback started to claw back Wednesday's losses, flexing its muscles against most of its major peers.
The AUD/USD cross was seen moderately in green, trading 0.11% higher at $0.7687, falling from $0.7737 - its highest level since March 30, while the US dollar index jumped 0.99% to 99.913 on Thursday.
Meanwhile, US jobless claims rose to 281,000 in the week ending April 4, a deterioration from 267,000 a week before, while later in the morning wholesale inventories hit 0.3% in February, better than the anticipated hike of 0.2%, compared to the revised growth of 0.4% in January.
Central banks eyed
Earlier this week, the Reserve Bank of Australia surprisingly left the cash rate on hold at 2.25%, however the bank's policy statement unveiled the further easing of policy may be appropriate over the period ahead in order to foster sustainable growth in demand and inflation consistent with the target.
Meanwhile, the Federal Reserve's (Fed) minutes revealed that the June meeting remained in consideration for a rate hike, while some policymakers favored a later date as they were unsure about how long the lower oil prices and a stronger dollar would continue to distort inflation data.
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AUD/USD forecast for the week of April 13
The AUD/USD pair went back and forth during the course of the week, essentially settling on a small gains for the week. The 0.75 level below continues offer support, but then again there is a significant amount of resistance at the 0.80 level. At this point in time, we prefer to sell this market on shorter-term rallies, as we believe that the downtrend is most certainly still in effect. Nonetheless, we think that it’s going to be difficult to trade this market from the longer-term perspective, simply because there is in a whole lot of room to move at the moment.
AUD/USD Forecast April 13-17
It was a rather uneventful week for the Australian dollar, which ended the week almost unchanged. AUD/USD closed the week at 0.7673. The upcoming week has eight events, highlighted by Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
In Australia, Retail Sales beat the estimate, while the RBA maintained interest rates at 2.25%, as expected. In the US, employment numbers were very positive last week. JOLTS Job Openings improved and the 4-week jobless claims was the lowest since 2000.
* All times are GMT.
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Economic data due from Australia
Coming up from Australia at 0130GMT:
Credit card purchases for February
Credit card balances for February
Neither are much on an immediate FX market focus
AUD/USD: Aussie Spikes as Business Sentiment Picks Up - See more at: http://wbponline
A well-known business survey showed one of the first signs that the Australian economy has improved since interest rates were cut to a record low in February, which immediately saw the Australian currency pick up some lost pace on Tuesday.
The AUD/USD pair gained more than 40 pips to trade at $0.7621 early Tuesday afternoon in Sydney, from $0.7581 at the close of trade in New York on Monday.
The National Australia Bank (NAB) Business Confidence Index rose from zero in February to 3 last month, while the NAB Business Conditions Index jumped to 6 from 2, the highest it has been since October.
An index reading above zero shows an improvement in conditions, while a figure below zero represents worsening conditions.
The sharp improvement in business conditions likely reflects the decline in interest rates following the Reserve Bank's decision to cut the benchmark rate to its lowest ever in February.
NAB chief economist Alan Olster said on Tuesday that the level of conditions points to a slightly above average rate of activity.
Until today there had been few signs that the lower level of interest rates was helping to stimulate growth, and while it is early days, the pick up in confidence is an early sign that businesses are beginning to see the light at the end of the tunnel.
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AUD/USD: Aussie Jolts Higher on Positive Labor Report
The strongest job growth in Australia in five months was enough to push the local currency up more than 1% on Thursday, in one of the latest signs that the economy is not doing quite as bad as feared.
The AUD/USD pair jumped 1.3% to $0.7771, the highest it has traded since late March, from $0.7675 at the start of Thursday's session. Prior to the release the cross rate sat little above $0.77.
Australia's unemployment rate fell to 6.1% last month from a revised 6.2% in February, the Australian Bureau of Statistics data revealed on Thursday, coming in much stronger than the forecast rate of 6.3%.
The data also showed that almost 40,000 jobs were added to the economy last month, much more than the 15,000 jobs forecast by analysts.
While a 6% rate of unemployment is still high for Australia, today's data shows that the labor market is in better shape than most economists - and some policymakers - feared.
This suggests that Australia's growth transition following the downfall of the mining-investment boom may not be as brutal on labor demand as some had expected, however it is too early to say whether job growth will be sustained, with recent data fluctuating greatly.
AUD/USD: Bulls Take Another Swing as Aussie Scales 3-Wk Highs
The Australian dollar pummeled its namesake from the US on Thursday as a combination of upbeat data from down-under and frail macro-reports from the world's most important economy opened up a trap door under the greenback.
The so-called aussie attempted to extended its advance by another 25 pips after already breaking above the $0.78 marker for the first time since March 26 earlier in the session.
Most recently, the pair traded 1.76% higher at $0.7809 per Australian dollar.
The latest leg up was fueled by some dovish comments from Federal Reserve (Fed) officials. Atlanta Fed chief Dennis Lockhart suggested policymakers should wait for data to clear up before attempting to raise rates, while Boston Fed President Eric Rosengren also suggested that the conditions necessary for lift-off have not yet been met.
Even the usually hawkish Loretta Mester from the Cleveland Fed appeared to have backpedaled on her recent calls for a mid-year lift-off on Thursday. Rather, she wanted to wait for incoming information to confirm growth was rebounding. If that was the case, she would be comfortable with lift-off "relatively soon."
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