We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • #Forex Forecast via @DailyFX: US Dollar Technical Outlook on $DXY, $AUDUSD, $USDCAD, $USDJPY & $EURUSD Full Analysis ⬇️ https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/11/17/usd-price-us-dollar-chart-forecast-dxy-audusd-usdcad-usdjpy-eurusd.html
  • Further escalation in Hong Kong will likely bode poorly for risk appetite https://t.co/0NjUd3ahBu
  • How should you trade around event risks and what steps can you take to improve your trading psychology? Find out from @JoelKruger, a trading consultant and mentor. Only on Global Markets Decoded. Missed the episode? Read up here:https://t.co/JWIGJk4vKa https://t.co/WB39x4GP99
  • Poll - Does your personality match your #tradingstyle? Vote and find out from @WVenketas here: https://t.co/vREsUIWSJd https://t.co/Ft0ExAmMpq
  • #Dow Jones hits record high, however, central bank liquidity prompts volatility implosion. #FTSE 100 among underperformers with focus remaining on politics. Get your #equities market update from @JMcQueenFX here: https://t.co/EOFleGSeBp https://t.co/ecAyfSUeAM
  • RT @C_Barraud: 🇪🇺 #ECB’s Muller Says More Assets Could Join Stimulus List in Slump - Bloomberg https://t.co/roGEgu0VTQ
  • With increasing volatility in weather patterns, how might storms, hurricanes and floods rattle the supply chain for petroleum-based products and impact crude oil prices? Find out from @JStanleyFX here:https://t.co/O4dgBl47fq https://t.co/OQYqZAYt9S
  • Currency Strategist,@PaulRobinsonFX is a Swing trader. What is your #tradingstyle? Take the quiz and let us know: https://t.co/LPBOcS0Vtd https://t.co/WzRYeqRhUL
  • Despite what your #tradingstyle is, you should be keeping a trading journal. How can you start keeping a trading journal? Find out: https://t.co/0akgWbyJEw https://t.co/4ehMlN4zv1
  • The Euro’s struggle to move higher against a range of currencies continues and without further support this is likely to continue into the year-end. Get your $EURUSD market update from @nickcawley1 here: https://t.co/myZ7R0eGUb https://t.co/12WJd53Cx4
Australian Dollar Outlook Remains Bearish Despite Upbeat RBA Minutes

Australian Dollar Outlook Remains Bearish Despite Upbeat RBA Minutes

2012-08-25 02:05:00
David Song, Currency Strategist
Share:
Australian_Dollar_Outlook_Remains_Bearish_Despite_Upbeat_RBA_Minutes_body_Picture_1.png, Australian Dollar Outlook Remains Bearish Despite Upbeat RBA Minutes

Fundamental Forecast for Australian Dollar: Bearish

The Australian dollar slipped to a fresh monthly low of 1.0374 going into the last days of August and the high-yielding currency may continue to give back the advance from earlier this year as the fundamental developments on tap for the following week are expected to show a slowing recovery in the $1T economy. Indeed, building activity in Australia is projected to expand at a slower pace during the three-months through June, while business investments are expected to grow 3.0% after expanding 6.1% in the first-quarter.

Nevertheless, the Reserve Bank of Australia policy meeting minutes struck a rather upbeat tone for the region as the central bank anticipates domestic growth to offset the slowdown in the global economy, and it seems as though the board will stick to its wait-and-see approach over the coming months as Governor Glenn Stevens expects growth to remain ‘ close to trend.’ However, Mr. Stevens did take note of the persistent strength in the local currency, stating that the Australian dollar seems a ‘bit on the high side,’ and warned that the ‘peak of the resource investment boom as share of GDP – the highest such peak in at least a century – will occur within the next year or two’ in light of the slowdown in global trade. Although the central bank head remains ‘cautiously optimistic’ towards the economy, the RBA may have little choice but to carry out its easing cycle throughout the second-half of the year as China – Australia’s largest trading partner – faces a greater threat for a ‘hard landing.’ According to Credit Suisse overnight index swaps, market participants still see the RBA lowering the benchmark interest rate by at least 50bp over the next 12-months, and the AUDUSD may come under increased pressure next week should the economic docket spur increased bets for lower borrowing costs.

As downward trend carried over from 2011 remains intact, the AUDUSD certainly looks as though it’s carved out a lower top around the 1.0600 figure, and we will maintain our bearish forecast for the AUDUSD as the relative strength index continues to come off of overbought territory. As a result, we would like to see a break and a close below the 23.6% Fibonacci retracement from the 2010 low to the 2011 high around the 1.0370 figure as it holds up as interim support, but the AUDUSD may consolidate over the coming days as currency traders turn their attention to the Jackson Hole Economic Symposium on tap for next week. DS

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.