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
Bullish
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
GBP/USD
Bearish
USD/JPY
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
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Bullish
More View more
Breaking news

British Pound surges after UK exit poll shows Conservatives expected to win 368 seats out of 650

Real Time News
  • RT @FinancialTimes: To provide some historical context, if the #exitpoll is correct this will be Labour’s worst result in 84 years https://…
  • The rally in AUD/USD, NZD/USD and USD/JPY may prolong after the US-China trade deal and the UK Exit Poll induced a “risk-on” tilt in financial markets ahead of the APAC trading session $AUDUSD $NZDUSD $USDJPY #tradewar - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2019/12/13/USDJPY-AUDUSD-NZDUSD-Price-Rally-May-Extend-on-Trade-Deal.html?CHID=9&QPID=917702 https://t.co/vSglkq5azs
  • Large Conservative Majority expected, What Happens Next? $GBP https://t.co/Mz4kZXuFUX
  • Reaction from EU - Brussels expect trade talks will start in March. - However, they do not believe an ambitious trade deal is possible to be negotiated and ratified by Dec 2020 - Only possibility is quick FTA on EU terms - BBC's Adler $GBP
  • RT @EdwardLawrence: The source says a signing ceremony will not happen with President Xi. There will be a rollout of the agreement by the W…
  • RT @EdwardLawrence: The source says Dec 15th tariffs do not go forward. There will be a small reduction in tariffs on some Chinese goods as…
  • RT @EdwardLawrence: A trade source tells me this is a historic day. US & China agree to a Phase One deal on Paper. The source says Chinese…
  • 🇯🇵 JPY Tankan Large Manufacturing Index (4Q), Actual: 0 Expected: 3 Previous: 5 https://www.dailyfx.com/economic-calendar#2019-12-12
  • 🇯🇵 JPY Tankan Large Manufacturers Outlook (4Q), Actual: 0 Expected: 3 Previous: 2 https://www.dailyfx.com/economic-calendar#2019-12-12
  • 🇯🇵 JPY Tankan Small Non-Manufacturing Outlook (4Q), Actual: 1 Expected: 3 Previous: 1 https://www.dailyfx.com/economic-calendar#2019-12-12
Australian Dollar at Risk on RBA Outlook, Global Sentiment Trends

Australian Dollar at Risk on RBA Outlook, Global Sentiment Trends

2016-02-13 00:45:00
Ilya Spivak, Sr. Currency Strategist
Share:
Australian Dollar at Risk on RBA Outlook, Global Sentiment TrendsAustralian Dollar at Risk on RBA Outlook, Global Sentiment Trends

Fundamental Forecast for the Australian Dollar: Neutral

  • Aussie Dollar pares losses after dropping to lowest in almost 4 years
  • Updates on Fed, ECB outlook to drive Aussie alongside risk appetite
  • Has the Aussie moved as DailyFX analysts expected? Find out here!

The Australian Dollar dropped to the lowest level in close to four years against its major counterparts but prices launched a sharp recovery against the backdrop of a late-week rebound in risk appetite, erasing more than half the decline. Looking ahead, a busy docket of high-profile event risk offers ample scope for continued volatility.

On the domestic front, minutes from February’s RBA policy meeting and January’s employment report are in focus. The latter seems like a more potent catalyst for price action than the latter: RBA minutes rarely offer much by way of new content beyond the policy statement released at the time of the rate decision. A neutral tone there and in subsequent testimony from Governor Glenn Stevens is likely to see the markets focused on economic data.

Labor market figures are expected to show a net 13k jobs gain while the unemployment rate holds unchanged at 5.8 percent. Australian economic news-flow has stumbled relative to consensus forecasts over recent weeks and markets have taken notice, with the priced-in 12-month RBA rate path implied in overnight index swaps shifting deeper into dovish territory. Leading survey data suggests hiring weakened in the first month of 2016, opening the door for more of the same and threatening the Aussie.

Turning outward, global monetary policy trends and their influence on market-wide risk sentiment remain a critical consideration. Europe will share the spotlight with the US this time around as ECB President Mario Draghi testifies before an EU Parliament committee and the central bank releases minutes from January’s meeting. In both cases, traders will be keen to glean additional clues suggesting an expansion of stimulus is on tap in March. Comments to that affect are likely to boost overall risk appetite, offering support to the sentiment-linked Aussie.

On the US side of the equation, minutes from January’s FOMC meeting as well as the CPI data set are in the spotlight. The former will help shed light on the degree to which policymakers feel recent volatility has undermined their projected rate hike path. Last week’s comments from Chair Yellen suggested a deliberative posture but highlighted that officials are not as dovish as the priced-in market view implies. Investors have slashed policy bets to erase any further tightening from the 2016 outlook. The latter will help gauge whether the Committee has sufficient scope to act.

Leading survey data paints a relatively upbeat picture of price growth trends. Service-sector inflation – while still tepid – firmed for a fourth consecutive month. Meanwhile, manufacturing sector output prices grew at the fastest pace since August. If this translates into an uptick on the pace of core year-on-year CPI expansion against backdrop of Fed rhetoric extolling data dependence, returning rate hike bets may hurt risk trends and the Aussie Dollar alike.

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

DISCLOSURES

News & Analysis at your fingertips.