AUD/USD Fundamental Analysis May 25, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD continues to decline against the USD to reach 0.9742. The Aussie is slightly lower, trading in a tight range throughout the morning, after the release of key Chinese economic data. The HSBC PMI preliminary reading was reported at 48.70, a reading under 50.00 is considered negative and today’s reading was below last month’s also.

Overnight, the Australian dollar fell as low as 96.90 US cents, its lowest level since November 28.

There was not much of a reaction in currency markets after a summit of EU leaders ended. The meeting showed that France and Germany are divided on how to resolve the euro zone debt crisis, particularly on the issue of the European Central Bank issuing its own eurobonds.

This set the tone for the ongoing relationship for Hollande and Merkel.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data for May 23-24 actual v. forecast

GBP	Retail Sales (MoM)	-2.3%	-0.8%	2.0%
GBP	Retail Sales (YoY)	-1.1%	1.0%	3.1%
EUR	Industrial New Orders (MoM)	1.8%	-0.1%	-1.2%
GBP	CBI Industrial Trends Orders	-17	-10	-8
CAD	Core Retail Sales (MoM)	0.1%	1.0%	0.4%
CAD	Leading Indicators (MoM)	0.3%	0.3%	0.3%
CAD	Retail Sales (MoM)	0.4%	0.4%	-0.2%
USD	New Home Sales	343K	335K	332K
NZD	Trade Balance	355M	500M	186M
May 24	CNY	Chinese HSBC Manufacturing PMI	48.70	49.30