AUD/USD Fundamental Analysis March 30, 2012 Forecast

By FXEmpire.com

Analysis and Recommendation: (close of Asian session)

The AUD/USD is 0.7 of a cent lower as global stock markets continue to fall.

The Australian dollar was trading at 103.62 US cents, down from 104.35 cents.

Investors are fretting that manufacturing data out of China on April 1 will show that its factories are slowing output, reducing demand for Australia’s iron oil and coking coal.

Traders are also betting Australian’s central bank is set to cut interest rates over the next 12 months while in New Zealand rates are tipped to rise.

The RBA is expected to slash its cash rate by 61 basis points over the next 12 months, according to the Overnight Index Swap curve, narrowing the gap with New Zealand’s record low official cash rate of 2.5 per cent.

New Zealand’s central bank is seen lifting the OCR by 25 basis points in the next 12 months. That would narrow the gap in rates between the two countries making the kiwi appear relatively more attractive.

Economic Data March 28, 2012 actual v. forecast

EUR	French GDP (QoQ)	0.2%	0.2%	0.2%
EUR	M3 Money Supply (YoY)	2.8%	2.5%	2.5%
EUR	Private Loans (YoY)	0.7%	1.3%	1.1%
EUR	Italian Business Confidence	92.1	91.7	91.7
GBP	Business Investment (QoQ)	-3.3%	-5.4%	-5.6%
GBP	Current Account	-8.5B	-8.4B	-10.5B
GBP	GDP (QoQ)	-0.3%	-0.2%	-0.2%
EUR	Italian 6-Month BOT Auction	1.12%	1.20%
USD	MBA Mortgage Applications	-2.7%	-7.4%
EUR	German CPI (MoM)	0.3%	0.3%	0.7%
USD	Core Durable Goods Orders (MoM)	1.6%	1.5%	-3.0%
USD	Durable Goods Orders (MoM)	2.2%	3.0%	-3.6%
USD	Crude Oil Inventories	7.1M	2.5M	-1.2M
USD	Gasoline Inventories	-3.5M	-1.7M	-1.2M

Economic Events scheduled for March 30, 2012 that affect the JPY, AUD, and NZD

00:30 JPY Unemployment Rate 4.6% 4.6%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact relative to employment data from other countries because the Japanese economy is more reliant on the industrial sector than personal spending.

00:30 JPY Tokyo Core CPI (YoY) -0.3% -0.3%

The Tokyo Core Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers in Tokyo, excluding fresh food.

00:50 JPY Industrial Production (MoM) 1.4% 1.9%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

01:00 AUD HIA New Home Sales (MoM) -7.3%

Housing Industry Association (HIA) New Home Sales measures the change in the number of newly constructed homes sold.

13:30 USD Core PCE Price Index (MoM) 0.1% 0.2%

13:30 USD Personal Spending (MoM) 0.6% 0.2%

The Core Personal Consumption spending (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. Prices are weighted according to total expenditure per item. It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

14:45 USD Chicago PMI 63.1 64.0

The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI.

14:55 USD Michigan Consumer Sentiment Index 75 .1 74.3

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers.

Government Bond Auctions (this week)

Mar 29 00:30 Japan Auctions 2Y JGBs

Mar 29 09:10 Italy BTP/CCTeu auction

Mar 29 17:00 US Usd 29.0bn 7Y Notes

Mar 30 14:30 UK Publication of the DMO Q2 Gilt operations calendar

Mar 31 n/a Spain IGCP deadline for Q2 T-bill issuance programme

Apr 03 09:30 Belgium Auctions 3 & 6M T-bills

Apr 03 09:30 UK Conventional Gilt Auction

Apr 04 08:30 Spain Bono auction

Apr 04 14:30 Sweden Details T-bill auction on Apr 11

Apr 05 08:50 France OAT auction

Apr 05 15:00 US Announces auctions

Apr 05 15:30 Italy Details BOT on Apr 11 & BTP/CCTeu on Apr 12

Originally posted here