AUD/USD news - page 15
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AUD/USD: Aussie Takes Another Leap Up, 3-Wk High
The Australian dollar took another leap higher versus its US namesake on Friday, supported after Australia's unemployment rate fell unexpectedly last month and US macro data disappointed, while traders now focus on the US inflation reading.
The aussie traded 0.49% higher at $0.7840 against the US dollar, its highest level in April, hiking for a second day from $0.7571 ahead of the Oz jobs data.
In the previous session, the aussie added significant gains after labor market data for March was released, posting surprisingly upbeat job growth of 37,700, which sent the unemployment rate down to 6.1% from a revised 6.2% (revised from 6.3%).
Another spike on Thursday came after the US jobless claims release showed the number missed estimates and edged up to a six-week high last week, while new residential construction also delivered a subdued reading for March.
Inflation in the US is expected to hit 0.1% in March, a slight improvement from zero growth a month before. Excluding food and energy, consumer prices are expected to rise 1.7% in March, measured year-on-year.
"While headline inflation is more volatile than the core reading, it is also the figure that is most visible to the average American, and therefore headline CPI is likely to play an important role in the Fed's policy decisions," Rabobank analysts said.
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AUD/USD forecast for the week of April 20, 2015
The AUD/USD pair broke higher during the course of the week, testing the 0.78 handle. With that, the market looks as if it is trying to rally a bit from here, but there should be a significant ceiling at the 0.80 handle. Because of this, we are going to wait for resistive candle in order to search selling as we believe the Australian dollar will continue to suffer at the hands of not only the US dollar, but soft commodity markets as well as the Aussie dollar tends to be very sensitive to them.
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AUD/USD: Aussie Dives as Stevens Pitches Rate Cut Option
The Australian dollar plunged on the prospect of further rate cuts by the Reserve Bank of Australia (RBA).
The so-called aussie traded with a loss of 0.58%, buying $0.7726 on Monday, having briefly slumped below $0.7710 in a response to the latest comments from RBA Governor Glenn Stevens.
The official indicated on Monday that policymakers stood ready to ease monetary policy even more, were the need to arise.
The central bank, which cut its cash rate to an all-time low of 2.25% in February, "clearly signaled a willingness to lower it even further, should that be helpful in securing sustainable economic growth," Stevens told the American Australian Association luncheon on Monday.
"The Australian dollar has declined and will very likely fall further yet, over time," the central banker added.
Previously the aussie had been trading with modest gains, attacking the $0.7820 marker, its highest level in nearly four weeks, failing to break higher for the third day in a row.
The rally was fueled by the announcement of the latest pro-growth measure in China after the economy grew 7% at the start of the year, the slowest pace since the global economic crisis.
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Preview of the RBA April Minutes due today
Due at 0130 on 21 April 2015 are the Minutes of the April Reserve Bank of Australia meeting, here's a preview and what to look for.
The big, immediate question for markets is how likely the RBA is to cut rates at its May meeting (due May 5).
While we'll be looking for indications in the Minutes we've also seen some improvement in the data since then. For example, business confidence up on the month (yeah, its only a pop on one month and more evidence needs to be seen), and last week's employment report exceeded expectations.
In March the RBA said they decided to hold rates (the market was widely expecting a cut) because
This is likely a key to watch. A similar passage (or absence thereof ...) will provide a strong hint.-
Note, we get Australian CPI for Q1 on Wednesday. While its unlikely to show much of a change from current low levels the impact of the fall in the Australian dollar may soon start to show up more in inflation data (and its probably worth noting that the fall in the NZD hasn't had a huge impact on inflation there - we got the most recent official data yesterday).
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Preview: Australian Inflation Data to Set Tone for RBA's May Meeting
Much like the rest of the world, Australia's consumer prices have experienced much softer gains over the last year, largely due to sharp declines in global oil prices, which have increased the scope for central banks to loosen monetary policy.
Inflation data due tomorrow could see that scope broadened for the Reserve Bank of Australia (RBA), with the CPI expected to have risen only 0.1% last quarter, or 1.3% year-on-year.
That would mark the second-consecutive quarter that inflation has fallen below the RBA's 2-3% medium-term target band.
However, a look at the less volatile measures of the CPI suggest that inflation is still within the RBA's target range, though only just.
While the impact of cheaper oil on inflation is expected to only be temporary, many central banks across the globe have capitalized on weak inflation by lowering interest rates in attempts to boost demand.
The RBA made such a move in February when the cash rate was slashed from 2.50% to a record low 2.25%.
Since then the RBA has held off on further loosening but has signaled that rate cuts are still very much on the cards. On Monday, RBA Governor Glenn Stevens reiterated this stance, saying that the "question of whether should be reduced further has to be on the table."
"In the case of monetary policy, the Reserve Bank has been offering support to demand, consistent with its mandate as expressed by the medium-term inflation target," Stevens said at the American Australian Association luncheon in New York on Monday.
"The Board has, moreover, clearly signaled a willingness to lower it even further, should that be helpful in securing sustainable economic growth," he added. However, Stevens also repeated that monetary policy does have limitations in stimulating growth.
On balance it seems quite likely that the RBA will lower rates again, given that the board forecasts weak growth over the next few years, however there have been some recent signs that the economy is doing better, such as recent employment data which exceeded expectations, and a pick up in business confidence.
Barclays analysts say they still anticipate a rate cut in May, however the probability is lower after last month's employment figures, which showed job growth of 37,700, instead of the forecast pick up of 15,000. Barclays say that market pricing suggests a 56% chance of a May rate cut, compared with 75% before the data was released last Thursday.
ANZ economists said in a note on Tuesday that Stevens' comments on Monday lower the probability of May rate cut towards 50/50 and ultimately reduce the probability of further cuts in the cash rate below 2%.
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AUD/USD: Aussie Jumps as CPI Exceeds Estimates
Australia's consumer prices continued to rise at a softer rate last quarter, although the pace was still above what analysts estimated, sending the Australian dollar higher on Wednesday.
The CPI rose 0.2% last quarter, coming in better than the median forecast of a 0.1% rise. The Australian Bureau of Statistics (ABS) data showed the annual change in the CPI easing from 1.6% in the December quarter to just 1.3% last quarter, in line with forecasts.
Australia's trimmed mean CPI - which central bankers are inclined to use - grew 2.3% last quarter, accelerating from the 2.2% rise seen in the previous quarter.
The central bank targets price growth of 2-3% annually.
While the data is somewhat ambiguous for rate expectations, the Australian dollar jumped more than 75 pips following the release, suggesting the data has reduced the likelihood of the Reserve Bank of Australia (RBA) cutting interest rates at next month's meeting.
The AUD/USD pair was trading at $0.7777 on Wednesday, jumping from $0.7713 beforehand.
Paul Dales of Capital Economics said after the CPI release that the data is unlikely to prompt the RBA to abandon its plans to cut interest rates in early May.
"If we are right in expecting GDP growth to slow this year, then the drag on inflation from the weaker labor market will grow. Underlying inflation would then fall to the lower bound of the RBA's 2-3% range," he said.
Australian dollar encounters more Chinese pressure
The independent HSBC / Markit Manufacturing PMI for China came out below expectations for April: 49.2 points, reflecting a slightly more pronounced slowdown than had been anticipated. This is the preliminary read and could still change, but it certainly goes hand in hand with other signs of slowdown from the world’s no. 2 economy and Australia’s no. 1 trade partner.
The Aussie is pressured, losing previous gains.
Early in the week, the Aussie rose and fell on weekend news from China. The authorities decided to cut by 1% the Reserve Ratio Rate (RRR) providing more stimulus for the economy and indirectly to Australian commodities.
However, after the initial rush, the mood in the markets changed and a different perception took hold: the Chinese move came because of significant weakness and is a worrying sign.
Also stronger US data helped push the pair lower, but not all is bad in Australia, so the pair isn’t doing too bad: inflation came out stronger than expected and could mean that the RBA might not really be in a rush to cut in May.
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AUD/USD Forecast Apr. 27 – May 1
The Australian dollar weakened during the week but was unchanged at week’s end. AUD/USD closed the week at 0.7808. This week’s highlight is PPI. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.
In the US, there was some good news on the housing front, with existing home sales beating expectations. However, New Home Sales failed to keep pace and Durable Goods Orders were a mixed bag. Australian inflation data was steady and helped the Aussie hold its own this week against the greenback.
* All times are GMT.
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AUD/USD almost unchanged, near 1-month highs
The Australian dollar was almost unchanged against its U.S. counterpart on Monday, hovering close to one-month highs as demand for the greenback remained under pressure after recent U.S. data dampened optimsm over the strength of the recovery.
AUD/USD hit 0.7837 during late Asian trade, the session high; the pair subsequently consolidated at 0.7817.
The pair was likely to find support at 0.7761, the low of April 24 and resistance at 0.7886, the high of March 26.
The greenback weakened after the Commerce Department reported Friday that orders for durable goods, excluding aircraft, fell 0.5% in March, after a downwardly revised 2.2% drop in February.
The headline figure rose 4.0%, beating expectations for a 0.6% gain, but investors focused on underlying weakness in the report.
The data came after recent weak reports on home sales, retail sales and industrial production, adding to signs of a slowdown in economic growth since the start of the year.
The weak data led investors to push back expectations on the timing of an initial rate hike by the Federal Reserve.
The Aussie was lower against the euro, with EUR/AUD up 0.12% to 1.3905.
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RBA head Stevens: Says he doesn't want to comment on monetary policy
Reserve Bank of Australia governor Stevens speech in Sydney this morning. Comments from the RBA head:
Headlines via Reuters: