By FXEmpire.com
AUD/USD Weekly Fundamental Analysis April 16-20, 2012, Forecast
Introduction: The Australian dollar still isn’t in its good old days, but the performance is definitely improving. Resistance lines tend to work in a smoother manner than support lines, but they also work well. The pair move well together, not much volatility, but easy to chart and easy to trade with low risk factors
Weekly Analysis and Recommendation:
The AUD/USD is about where it was a year ago but it’s unlikely to repeat that relatively steady performance over the coming 12 months. Ending the week at 1.0373 after hitting a high of 1.0453 after above forecast employment figures.
For about half the time since the Australian dollar was allowed to trade freely on the market in December 1983, its exchange rate against the US dollar has been more than eight per cent away from its level a year before.
For a quarter of the time, it’s been 16 per cent or more away from its level a year previously, and for 11 per cent of the time, it’s been 20 per cent or more higher or lower than it was a year earlier.
Based on its current exchange rate of US 104 US cents, those figures suggest a 50-50 chance that in year’s time it will be outside the range of – in round figures – 96 to 112 US cents.
And they suggest a one in four chance it will be outside the 87 to 121 US cents range and a one in nine chance it will be outside the 83 to 125 US cent band.
It’s often said that the best forecast for an exchange rate a year from now is whatever it happens to be right now.
That’s not to say such a forecast is likely to be right – it’s just that the vagaries of forecasting exchange rates mean that any error is just as likely to be on the upside as the downside.
|
Date |
Open |
High |
Low |
Change % |
|
|
04/13/2012 |
1.0373 |
1.0437 |
1.0453 |
1.0356 |
-0.61% |
|
04/12/2012 |
1.0437 |
1.0319 |
1.0450 |
1.0305 |
1.14% |
|
04/11/2012 |
1.0318 |
1.0228 |
1.0333 |
1.0227 |
0.88% |
|
04/10/2012 |
1.0228 |
1.0307 |
1.0356 |
1.0228 |
-0.77% |
|
04/09/2012 |
1.0307 |
1.0291 |
1.0332 |
1.0258 |
0.16% |
Last week’s positives:
-Fed’s Beige Book said the “economy continued to expand at a modest to moderate pace from mid Feb thru late Mar”
-Germany continues its European economic outperformance as exports unexpectedly rise in Feb
-Chinese loan growth in March raises 1.01T yuan, well above estimates of 797.5b and the most since Jan ’11
-Chinese retail sales and IP both up
-US PPI flat m/o/m vs. forecast of up .3% but core rate rises .3% vs. expectations of up .2%
Last week’s negatives:
– Spanish and Italian bond yields jump again, IBEX and MIB stock indexes both fall more than 5% on the week, Spanish CDS at record high and not too far from Hungary
– French business confidence holds at lowest since Sept ’09 and IP and manufacturing production both less than expected
– China’s GDP grows 8.1% in Q1 vs. estimate of 8.4%, Mar CPI up 3.6%
– Initial Jobless Claims rise to 380k, a 10 week high.
– Chinese CPI rate of change in line but index at new record high and continues rising faster than wage growth
– consumer confidence down slightly but components mixed as while Current Conditions fell, the Outlook rose to the highest since Sept ’09,
– The NFIB small business optimism index falls to 4 month low
– Markets searching for some hope of QE from the Feds
Major Economic Events for the past week actual v. forecast
|
Apr. 09 |
CNY |
Chinese CPI (YoY) |
3.6% |
3.3% |
3.2% |
|
Apr. 10 |
USD |
Fed Chairman Bernanke Speaks |
|||
|
JPY |
Interest Rate Decision |
0.10% |
0.10% |
0.10% |
|
|
JPY |
BoJ Press Conference |
||||
|
Apr. 12 |
Trade Balance |
0.3B |
2.0B |
2.0B |
|
|
USD |
Trade Balance |
-46.0B |
-52.0B |
-52.5B |
|
|
USD |
Initial Jobless Claims |
380K |
355K |
367K |
|
|
Apr. 13 |
CNY |
Chinese GDP (YoY) |
8.1% |
8.3% |
8.9% |
|
USD |
Core CPI (MoM) |
0.2% |
0.2% |
0.1% |
|
|
USD |
CPI (MoM) |
0.3% |
0.3% |
0.4% |
Coming up this week:
On Tuesday, the Reserve Bank of Australia will make available the minutes of its latest policy meeting, where it kept interest rates on hold for the third consecutive time. Investors will pore over the release for any hint on the likely direction of interest rates in the future.
On making its April decision, the RBA hinted a cut may be on the horizon given its economic forecasts were overly optimistic. The RBA last cut the cash rate in November, but has come under intense pressure from various industries, especially the manufacturing sector, to lower the rate again.
A steady week in local news kicks off with February lending finance from the Australian Bureau of Statistics on Monday.
Tuesday sees new car sales data for March released by the ABS.
On Thursday, National Australia Bank will release its business conditions index for the first quarter.
Friday sees the ABS set out international trade price data for the first quarter.
Economic Highlights of the coming week that affect the Yen, the Aussie, the Kiwi and the Chinese Yuan
|
Apr. 17 |
05:30 |
JPY |
Industrial Production (MoM) |
-1.2% |
|
Apr. 18 |
23:45 |
NZD |
CPI (QoQ) |
-0.3% |
Economic Highlights of the coming week that affect the US Dollar
|
Apr. 16 |
13:30 |
USD |
Core Retail Sales (MoM) |
0.6% |
0.9% |
|
13:30 |
USD |
Retail Sales (MoM) |
0.4% |
1.1% |
|
|
13:30 |
USD |
NY Empire State Manufacturing Index |
21.1 |
20.2 |
|
|
14:00 |
USD |
TIC Net Long-Term Transactions |
101.0B |
||
|
Apr. 17 |
13:30 |
USD |
Building Permits |
0.71M |
0.71M |
|
13:30 |
USD |
Housing Starts |
0.70M |
0.70M |
|
|
14:15 |
USD |
Industrial Production (MoM) |
0.5% |
Originally posted here
