During the upcoming week we could continue to see the Aussie weaken against the greenback if the reserve currency continues to lose its status as a funding source. Therefore, we may see carry flows unwind back into the U.S. dollar but they could be replaced by the Yen, so watch for further Aussie strength against the traditional low yielder. The upcoming economic calendar carries a sizable amount of event risk with consumer confidence, inflation data, and employment figures on tap. Economists are forecasting a rise in the unemployment rate to 5.9%, but that may be due to an increase in the labor pool on rising optimism. The gauges for consumer confidence and inflation expectations will garner attention from the central bank as they cited the two as reasons for the current tightening. A rise in both will only reinforce the outlook for higher rates and could generate support for the commodity dollar.- JR
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