The AUD/USD moved higher and the Australian dollar gained versus the US dollar on Thursday, but at the meantime it weakened versus other majors after the Central Bank of Singapore will allow extra gains in the nation’s currency for the third tightening of monetary policy in a year.
On the other hand, the US dollar retreated against its all major currencies, as the expectations noted that the Fed will delay rising interest rates, pushing investors to sell the dollar.
Furthermore, US policy makers said that rising inflation rate is transitory, which could prevent them from hiking interest rates following ECB. This fact could give the Australian dollar to gain against the greenback.
Moreover, the analysts expect the Australian commodities to retreat in the next two years, which has a negative impact on the nation’s currency.
The Australian economy showed that inflation expectations declined to 3.5% in March, from 3.6% in February, means the Reserve Bank of Australia won’t hike interest rates during the next meeting, pushing the AUD to slid and won’t set more records.
On Friday, Australian economy still lacks major data but the focus for aussie will be first Chinese fundamentals. China is Australia’s biggest trading partner and with the GDP expected slightly lower and inflation on the rise more policy tightening expectations from China will dampen the appeal of aussie on weaker demand prospects from China and trigger a wave of pessimism which will favor the dollar over aussie.
As for the U.S. economy will issue its consumer price index at 12.30 GMT. Inflation is expected with 0.4% rise compare with 0.5%, on the year inflation is expected to rise to 2.6% from 2.1% previous.
The total net TIC flows for February at 13:00 GMT. Last month it recorded a rise of $32.5 billion while the net long-term TIC flows was $51.5 billion a rise is to be a good support for the dollar on faith in the US economy and help cover the trade gap.
Industrial production for March will be released at 13:15 GMT and expected to show a rise of 0.5% compare with the last drop of 0.1%, the capacity utilization index for March could show a rise of 77.3% from the previous of 76.3%.
Finally, U.S. will release University of Michigan survey of consumer confidence sentiment during April at 13:55 GMT, the preliminary reading is expected to come at 69.0 compare with the previous reading of 67.5.
Originally posted here
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