By FXEmpire.com
AUD/USD Weekly Fundamental Analysis April 23-27, 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 trading at 1.0379 and remained in a channel of 1.0418 to 1.0305.Earlier in the week, it looked like the Aussie was going to break out and move upwards but it never gathered the momentum.
The weight is on Asian equities today (though China is outperforming), with the region headed towards a flat to lower performance on the week. The global all-world aggregate (based on MSCI data) has fared a bit better, but could be flat as well depending on today’s Western market performance. The equity background has played against a generally better bid USD, in keeping with the typical correlation in a week where risk sentiment remained fairly repressed. Indeed, sentiment has been repressed enough to give both the USD and EUR a bid (on a trade-weighted basis) versus Asian non-Japan currencies. Yesterday we commented that despite the apparent near term re-acceleration in industrial production in Asia, global growth dynamics are still too repressed to suggest a driver for currency appreciation. Instead it is the Federal Reserve and monetary expansion that most favors support for the Asian FX space; in the near term on its own merits, Asia non-Japan will find difficulty in sustaining rallies. Indeed next week both the Federal Reserve and Bank of Japan will announce policy, and it is the latter that looks biased to continue to ease given Governor Shirakawa’s recent comments regarding “continuing powerful monetary easing”.
Yesterday’s Spanish bond auction did not bring any kind of horrible market punishing result, though auction yields were of course higher than back in January when the last 10-year sale occurred. Ultimately Spanish bonds fell post-auction, and the 10-year sold off to yield 5.925% vs. the 5.743% at the auction
HSBC economists said Friday that they believe Australian consumer inflation will need to come in at 0.6% or below for the Reserve Bank of Australia to cut interest rates when it meets in May.
Major Economic Events for the past week actual v. forecast
|
USD |
Retail Sales (MoM) |
0.8% |
0.3% |
1.0% |
|
USD |
Core Retail Sales (MoM) |
0.8% |
0.6% |
0.9% |
|
AUD |
Monetary Policy Meeting Minutes |
|||
|
EUR |
ECB President Draghi Speaks |
|||
|
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
|
GBP |
MPC Meeting Minutes |
|||
|
GBP |
Claimant Count Change |
3.6K |
7.0K |
4.5K |
|
CAD |
BoC Monetary Policy Report |
|||
|
USD |
Initial Jobless Claims |
386K |
370K |
388K |
|
USD |
Existing Home Sales |
4.48M |
4.62M |
4.60M |
|
GBP |
Retail Sales (MoM) |
1.8% |
0.5% |
-0.8% |
|
GBP |
Retail Sales (YoY) |
3.3% |
1.4% |
1.0% |
|
CAD |
Core CPI (MoM) |
0.3% |
0.4% |
Monday sees March quarter producer price index data released by the ABS. Analysts are tipping the figures to show that producer prices rose by 0.5 per cent in the quarter and by 2.2 per cent over the year, suggesting that price pressures at a producer or business level are contained.
Tuesday sees long awaited consumer price index figures for the quarter. Economists are expecting the data to show the headline rate of inflation rose by 0.5 per cent, with the annual growth rate easing from 3.1 per cent to 2 per cent.
Markets are closed on Wednesday for the ANZAC Day public holiday.
On Thursday, the Department of Education and Workplace Relations will release its skilled vacancies index for March.
Friday brings March new home sales data from the Housing Industry Association.
And finally, the Bank of Japan will hold it monetary policy meeting for April, and release its outlook report.
Economic Highlights of the coming week that affect the Yuan, Yen, Aussie and Kiwi
|
AUD |
CPI (QoQ) |
0.6% |
|
|
AUD |
Trimmed Mean CPI (QoQ) |
0.6% |
0.6% |
|
USD |
New Home Sales |
320K |
313K |
|
USD |
CB Consumer Confidence |
70.3 |
70.8 |
|
USD |
Durable Goods Orders (MoM) |
-1.5% |
2.4% |
|
USD |
Core Durable Goods Orders (MoM) |
0.5% |
1.8% |
|
USD |
Interest Rate Decision |
||
|
NZD |
Interest Rate Decision |
2.50% |
2.50% |
|
JPY |
Tokyo Core CPI (YoY) |
-0.4% |
-0.3% |
|
JPY |
Unemployment Rate |
4.5% |
4.5% |
|
JPY |
Retail Sales (YoY) |
9.8% |
3.5% |
|
JPY |
Interest Rate Decision |
0.10% |
Click here for updated AUD/USD News.
Originally posted here
