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
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • The latest UK General Election opinion polls continue to show the Conservative Party holding a strong lead over Labour and point to Boris Johnson winning a working majority in Parliament. Get your $GBPUSD market update from @nickcawley1 here: https://t.co/qF04EOUWkI https://t.co/LNl4bXbnpp
  • Recent polls have put Conservatives ahead of Labour and given a boost to $GBP. Get your #Brexit update from @ZabelinDimitri here: https://t.co/l2n53C0cYY https://t.co/oTWfXkaDDt
  • What are the truths and myths of #forex trading? Find out from @DailyFX analysts here: https://t.co/uF75VPzstr #FOMOintrading https://t.co/xeromAGqqx
  • Macro data from around the world have long attested to the urgent need for a trade settlement between the US and China. Increasingly the corporate numbers are saying the same. Get your market update from @DavidCottleFX here:https://t.co/Qon7QUO80c https://t.co/rCOG78QQ2M
  • #Gold prices may fall while the US Dollar gains even as economic policies championed by the Trump administration invite inflation. Get your market update from @IlyaSpivak here: https://t.co/4lHhHsby56 $XAUUSD https://t.co/JmZxckVHdS
  • Cable (GBP/USD) remains just off its seven-month high print around 1.3165 as traders start to move to the side lines ahead of next Thursday’s General Election vote. Get your $GBPUSD market update from @nickcawley1 here: https://t.co/CpCh13J9ZH #Brexit https://t.co/PIh6WUqbsK
  • (Weekly Technical Outlook) GBP/USD, EUR/GBP, GBP/JPY, GBP/CAD Outlook as UK Election Looms $GBPUSD $EURGBP $GBPJPY #UKelection2019 - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/12/07/GBPUSD-EURGBP-GBPJPY-GBPCAD-Outlook-as-UK-Election-Looms.html?CHID=9&QPID=917702 https://t.co/iuILHYczJ7
  • Why do you require consistency in trading and why does it matter? Find out: https://t.co/WlEFlluGfZ #tradingstyle https://t.co/TkMtJQKatx
  • By issuing debt denominated in $USD, China is making a long-term bet that it will be cheaper to pay back its loans over time in the US Dollar; it believes the value of the US Dollar will fall. Get your market update from @CVecchioFX here:https://t.co/5GO9UrvO4y https://t.co/xV9urXXf48
  • What are some risk trading management techniques? Find out: https://t.co/RShdlDz9RA #tradingstyle https://t.co/M3ASPIHAep
AUD Braces For Jawboning From Stevens And Quarterly Inflation Data

AUD Braces For Jawboning From Stevens And Quarterly Inflation Data

2014-07-18 22:57:00
David de Ferranti, Currency Analyst
Share:
AUD Braces For Jawboning From Stevens And Quarterly Inflation Data

Fundamental Forecast for Australian Dollar: Neutral

  • AUD/USD finishes flat despite a bumpy week on RBA minutes, China data, and geopolitical shocks
  • CPI figures and Stevens’ speech unlikely to shift expectations for a “period of stability” for rates
  • If geopolitical tensions fail to intensify, traders could return to the Aussie for its yield appeal

The Australian Dollar’s consolidation continued over the most recent week with AUD/USD remaining within its narrow range between 0.9210 and 0.9440. A status-quo set of Minutes from the RBA and positive Chinese second quarter growth figures failed to inspire the Aussie bulls. While a sell-off on heightened geopolitical tensions proved to be short-lived, with the currency bouncing back during Friday’s trading. Over the week ahead, two key themes are likely to continue to offer the Aussie guidance; policy expectations and risk appetite.

On the risk-appetite front; geopolitical turmoil carries the potential to put pressure on the risk-sensitive currencies like the Aussie. There is considerable uncertainty over whether the flare-up between Israel and Hamas, as well as tensions in Eastern Europe could escalate, which could leave traders hesitant to move back to the Aussie. Investors’ reactions to the latest developments suggests that the market is highly sensitive to outside shocks at present. If either situation were to intensify, it could lead to an unwinding of AUD carry trade positions built up over recent months.

However, we have witnessed several of these geopolitical shocks this year, which have ultimately failed to leave a lasting impact on sentiment. When the dust settles from the latest flare-up traders could again be tempted to return to the Aussie for its yield appeal.

Next week’s domestic CPI data and speeches by RBA officials could feed the policy expectations theme. A surprise second quarter inflation reading may see a knee-jerk reaction from the currency, however given a shift in the rate outlook remains unlikely at this stage, follow-through could prove limited.

Similarly, another attempt at jawboning the Aussie lower from Stevens may fail to leave a lasting impact on the unit. In recent addresses the RBA Governor has simply been delivering the central bank’s view that the currency is overvalued, and at this stage remains unwilling to take action such as intervention to put pressure on the AUD. For views on the US Dollar side of the AUD/USD equation, refer to the US Dollar outlook available here.

Written by David de Ferranti, Currency Analyst, DailyFX

To receive David’sanalysis directly via email, please sign up here

Contact and follow David on Twitter: @DaviddeFe

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

DISCLOSURES

News & Analysis at your fingertips.