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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • China A50 Index, which exhibited little correlation with the US stock market in the past, rose more than 1% to 15,900. An immediate resistance level can be found at 16,000 (chart below). https://t.co/Zxsh0wUpV7
  • Wall Street Futures Update: Dow Jones (+1.125%) S&P 500 (+1.103%) Nasdaq 100 (+1.087%) [delayed] -BBG
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/7mYrLT7zcL
  • 🇯🇵 Consumer Confidence (OCT) Actual: 33.6 Previous: 32.7 https://www.dailyfx.com/economic-calendar#2020-10-29
  • Heads Up:🇯🇵 Consumer Confidence (OCT) due at 05:00 GMT (15min) Previous: 32.7 https://www.dailyfx.com/economic-calendar#2020-10-29
  • Fear has reared its ugly head this past session. Will a fire burn when for risk assets like the Dow even as attention is drawn forward to next week's Presidential election? I discuss my views in today's trading video: https://www.dailyfx.com/forex/video/daily_news_report/2020/10/29/Dow-and-Nasdaq-Enter-Technical-Corrections-Dollar-Plays-Safe-Haven-Ahead-of-GDP-and-FAANGs.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/KYexqG2pEa
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.86%, while traders in NZD/USD are at opposite extremes with 69.17%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/yOLbxwOKhF
  • The Indian #Rupee may weaken following a breakout higher in $USDINR over the past 24 hours. Despite rising global stock market volatility, the #nifty50 has been holding its ground. Could it capitulate lower? - https://www.dailyfx.com/forex/technical/article/special_report/2020/10/29/Indian-Rupee-Nifty-50-Forecast-USDINR-Breakout-as-Volatility-Spikes.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/GPQSQMvUsn
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.28% 🇨🇦CAD: 0.24% 🇬🇧GBP: 0.16% 🇨🇭CHF: 0.10% 🇪🇺EUR: 0.07% 🇯🇵JPY: -0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/YuqROnNqY7
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: US 500: 0.95% Wall Street: 0.95% France 40: 0.56% Germany 30: 0.46% FTSE 100: 0.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/kACR087bkv
AUD Eyes 2014 Low As Yield Appeal Wanes Amid Volatility Swell

AUD Eyes 2014 Low As Yield Appeal Wanes Amid Volatility Swell

2014-09-27 04:41:00
David de Ferranti, Currency Analyst
Share:
AUD Eyes 2014 Low As Yield Appeal Wanes Amid Volatility Swell

Fundamental Forecast for Australian Dollar: Bearish

  • AUD/USD Remains Exposed As Volatility Swell Saps Carry Demand
  • High Threshold For Upcoming Regional Data To Catalyze A Recovery
  • Bearish Technical Signals Leave Sights Set On 2014 Lows Near 0.8660

The Australian Dollar faced another week of heavy selling pressure as traders likely unwound carry trades amid of a surge in market volatility. Further, a void of major domestic economic data left the currency lacking bullish fundamental cues to catalyze a recovery.

The coming week brings a raft of local releases including building approvals, trade balance data and retail sales figures. Yet based on recent RBA rhetoric these are unlikely to materially shift policy expectations. This suggests the potential impact on the Aussie from the figures may be muted. In turn the AUD may be left looking elsewhere for sources of support.

Also on the docket will be the release of the official and final HSBC manufacturing figures from Australia’s largest trading partner, China. The upside surprise to last week’s preliminary PMI data failed to leave a lasting positive impact on the currency. This suggests there is a high threshold for Chinese data to generate a rebound for the AUD.

The key risk facing the Aussie remains the prospect of a mass exodus from carry trades. A rebound in measures of implied volatility suggests traders are anticipating large swings amongst the major currencies. This detracts from the attractiveness of the Aussie’s comparative yield advantage and leaves it vulnerable to further weakness.

Traders have their sights set on the 2014 lows for AUD/USD near 0.8660. While the magnitude of recent declines may open the door to some profit-taking, this may slow its descent rather than prompt a reversal. Refer to the US Dollar outlook for insights into the USD side of the equation. – DDF

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

DISCLOSURES