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
Oil - US Crude
Mixed
Wall Street
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
Gold
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
GBP/USD
Mixed
USD/JPY
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
More View more
Real Time News
  • Major investment bank models have touted USD selling, given the outperformance in US equities relative to its counterparts over the past month. How is this likely to impact the month-end rebalancing? Find out from @JMcQueenFX here:https://t.co/MtNrHmXZpD https://t.co/d00z4019XE
  • The medium-term #gold outlook still seems favorable as the #Fed, #ECB and more keep rates around 0. Immediate event risk ahead includes the #RBA and #BoC interest rate decisions, US jobs data and Brexit. Get your gold market update from @ddubrovskyFX here: https://t.co/ABXy78LmUn https://t.co/rCALcGaKOL
  • The trio of central banks overseeing the commodity currencies have already cut their main rates to all-time lows. Get your market update from @CVecchioFX here: https://t.co/OSUXrN5P3j https://t.co/Cxt86jl28N
  • The Japanese Yen fell for a third consecutive week with price testing resistance into June open. Here are the levels that matter on the $USDJPY weekly technical chart. Get your #currencies market update from @MBForex here: https://t.co/1QPXP0g7Ew https://t.co/WUtXHoRoQX
  • $USDZAR: A rally from here could be an important tell as to whether the level seen as support previously (17.76) will turn into a point of resistance for sellers to lean against. Get your $USDZAR technical analysis from @PaulRobinsonFX here:https://t.co/TNsQ4JJu6E https://t.co/I4yCjs2ja0
  • The US dollar continued to sell-off this week and the greenback’s future will be decided by commentary from the White House and not the Federal Reserve over the coming days and weeks. Get your #currencies market update from @nickcawley1 here: https://t.co/lpHneO3s2h https://t.co/bZ5klohLNd
  • #Gold prices have continued to push higher as expectations have built for global Central Banks to remain very loose and passive with monetary policy for the foreseeable future. Get your $XAUUSD technical analysis from @JStanleyFX here: https://t.co/h5tF3kAZfd https://t.co/VAYy9FGHcQ
  • Major investment bank models have touted USD selling, given the outperformance in US equities relative to its counterparts over the past month. How is this likely to impact the month-end rebalancing? Find out from @JMcQueenFX here:https://t.co/MtNrHmXZpD https://t.co/YvoHlUsdVr
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/X15k6b4ZyB
  • The month of May saw equities rise across the board. The #Dow Jones and #DAX 30 will look to hold above nearby support while the #Nasdaq 100 may look to attack all-time highs. Get your #equities market update from @PeterHanksFX here: https://t.co/dQxkG68R0I https://t.co/cgfcOs14qG
Australian Dollar Wobbles But Won't Fall Down

Australian Dollar Wobbles But Won't Fall Down

2016-12-10 01:24:00
David Cottle, Analyst
Share:
Australian Dollar Wobbles But Won't Fall Down

Fundamental Forecast for the Australian Dollar: Neutral

  • The Aussie has ridden out one tough week
  • If it gets another, it may ride that out too
  • The RBA probably has the Fed on its collective mind

The Australian Dollar has held up rather well given a week of domestic data which might well have tried bulls’ patience. So it’s tempting to suggest that, if first-tier data didn’t knock the currency too hard, then this week’s generally second-tier releases won’t either.

And the currency had a lot to ride out.

The Lucky Country’s third-quarter Gross Domestic Product release tested that particular sobriquet almost to destruction, with growth coming in way below what markets had expected. Then came some more bad news, in the form of an unexpectedly yawning trade gap.

But look at the Aussie. AUD/USD started this week at 0.74558. It looks set to end it little changed, despite all of the above.

However, this fundamental vigor has its roots in three factors. The first is interest-rate support. Financial markets do not at this stage believe that the Reserve Bank of Australia will be cutting their Cash Rate much below the current record low of 1.5%. That’s if they opt to cut it at all. Even at record lows Australian rates still look pretty tempting to those who want developed-market, solid-credit-rating exposure. Objectively 1.5% isn’t much, but it’s more than you get across the US, much of the Eurozone or the UK.

The second is a bit of seasonality. Weaker third quarters are not wholly uncommon in Australia, or indeed in other developed economies. They often set the stage for a holiday-backed fourth quarter fightback. According to wire reports, analysts still expect that we will get one, and that the shock growth contraction seen in the quarter to September will not morph into Australia’s first technical recession for more than twenty-five years.

The third is China. Signs of stabilization there bode well for Australia, given its vast raw material export links with the world’s number two economy. The Aussie got a brief fillip last week as Chinese trade data came in strong.

So, what can we look forward to next week? Well, on the domestic slate we have the National Australia Bank’s business confidence index for November. That comes up on Tuesday. Then comes the Westpac consumer confidence indicator for December. This will be an interesting one as it will be one of the first gauges of likely holiday spending appetite.

Lastly we have the official employment change and unemployment rate figures. All these data offer more clues as to how the fourth quarter is likely to play out. This has become a lot more important since last week. Any signs that it may not offer the spring-like bounce back from the third quarter’s disappointment could put the Australian Dollar under some pressure.

After all, the Reserve Bank of Australia took the chance to reiterate the baleful effects of a strong Aussie on its mandate earlier this week. More weak numbers may make it minded to do what it can about that.

However, it’s possible of that higher US rates will do some of the RBA’s work for it in 2017, and that the RBA will keep its own council until it sees what the Federal Reserve does. That may see the Aussie ride out another week, even if the data disappoint.

So, how’s DailyFX doing? Check out our analysts’ forecasts.

--- Written by David Cottle, DailyFX Research

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

DISCLOSURES

News & Analysis at your fingertips.