News & Analysis at your fingertips.

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.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
Wall Street
More View more
Real Time News
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here:
  • What are some technical and fundamental factors affecting the equities market? Get your free forecast here: #DailyFXGuides
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge:
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here:
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here:
  • What's the difference between leading and lagging indicators? Find out from here:
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here:
  • Make smart trading decisions with your free guide to trade the news. Download your free guide here. #DailyFXGuides
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here:
  • Gold snapped a two-week losing streak but keeps price within the broader August downtrend. These are the levels that matter on the $XAUUSD weekly chart. Get your market update from @MBForex here:
Australian Dollar Rebound to be Tested by RBA Minutes, FOMC

Australian Dollar Rebound to be Tested by RBA Minutes, FOMC

Ilya Spivak, Head Strategist, APAC
Forex_Australian_Dollar_Rebound_to_be_Tested_by_RBA_Minutes_FOMC_body_Picture_5.png, Australian Dollar Rebound to be Tested by RBA Minutes, FOMC

Fundamental Forecast for Australian Dollar: Bullish

  • Aussie Dollar Rebound Launched Alongside Shift in DailyFX SSI on China Stabilization
  • RBA Meeting Minutes Sought for Confirmation of a Shift to Neutral on Rates Outlook
  • FOMC Rate Decision May Undermine Aussie Recovery if Fed Signals “Taper” Cycle

We’ve argued in favor of a significant Australian Dollar recovery since early August. We noted that an improvement in Chinese news-flow will probably help stabilize economic growth expectations for the East Asian giant. China is Australia’s largest trading partner and a critical source of demand for the country’s pivotal mining sector. That meant that stabilization in China was likely to translate into an improved the outlook for Australian exports and the business cycle overall. This in turn would prompt a supportive shift in RBA monetary policy expectations and lay the groundwork for an Aussie recovery. The case for an upside scenario seemed all the more compelling given a backdrop of highly over-extended speculative net-short positioning and we proceeded to enter long AUD/USD after an attractive technical setup presented itself.

A cautious recovery now seems to be underway as expected. However, the week ahead will see the Aussie’s resilience severely tested as the currency takes on high-profile event risk on both the domestic and the global front. Minutes from September’s RBA policy meeting are first to cross the wires. That sit-down produced what the markets interpreted as a shift away from an overtly dovish posture to a neutral one, sending the Australian unit sharply higher and igniting pent-up bullish forces waiting for their cue to overtake momentum. With that in mind, traders will be keenly interested to parse the minutes for confirmation of the tone shift gleaned from the initial policy statement. It is rather rare for RBA meeting minutes to deviate materially from the Governor’s remarks released along with the rate decision. The potential for volatility remains however, and a stray comment that is perceived to amplify or undermine the latest improvement in the Aussie’s policy profile can send the currency higher or lower, respectively.

Thereafter, macro-level forces come into focus as all eyes turn to the Federal Reserve as the policy-setting FOMC committee convenes for its monthly meeting. The outing is expected to produce the first “taper” of the QE3 stimulus program, with the baseline scenario calling for a $10-15 billion cutback in monthly asset purchases. The path forward beyond that remains highly uncertain however. That means the FOMC’s updated set of economic forecasts as well as Chairman Ben Bernanke’s press conference following the policy decision will be surrounded with plenty of speculation and offer ample fodder for volatility. If investors are met with Fed rhetoric that (directly or indirectly) argues in favor of a sustained QE reduction cycle into the end of the year, market-wide risk sentiment is likely to deteriorate and pull the Aussie Dollar downward. A more cautious approach that presents a Fed that still sees stimulus withdrawal as highly data-dependent and injects uncertainty into the near-term policy outlook stands to produce the opposite dynamic.

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