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
Oil - US Crude
Wall Street
More View more
Real Time News
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here:
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here -
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here:
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here:
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:
  • The price of #oil may continue to trade in a narrow range as the rebound from the September low ($36.13) appears to have stalled ahead of the month high ($43.43). Get your #commodities update from @DavidJSong here:
  • The Australian Dollar may extend its slide lower despite the planned easing of Covid-19 restrictions, as the market continues to price in an RBA rate cut on October 6. Get your #currencies update from @DanielGMoss here:
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your USD/INR market update here:
  • 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:
  • #Gold prices have plunged nearly 11% off the record highs with a breakout risking further losses. Here are technical trade levels that matter on the XAU/USD weekly chart. Get your #metals update from @MBForex here:
Australian Dollar Might Get Some Respite If Inflation Holds Up

Australian Dollar Might Get Some Respite If Inflation Holds Up

2018-10-27 03:00:00
David Cottle, Analyst
Please add a description for the image.

Fundamental Forecast for AUD:Neutral

Fundamental Australian Dollar Forecast:

  • AUD/USD remains under severe fundamental pressure
  • However, it has so far remained just above its recent, 2018 lows
  • A strong inflation print could keep it there

Find out what retail foreign exchange traders make of the Australian Dollar’s prospects right now, in real time, at the DailyFX Sentiment Page

The Australian Dollar continues to languish close to this year’s lows against its US cousin, but, while there’s little scope to expect a turnaround, matters may not get much worse for its bulls this week.

The currency remains primarily beset by the yawning gap in monetary policy approaches between the Reserve Bank of Australia and the US Federal Reserve. While the Fed seems resolved to go on raising interest rates whatever President Donald Trump’s reservations , the RBA seems set to keep its own key Official Cash Rate at its 1.50% record low for many months yet. Indeed futures markets still don not predict a move for all of next year.

Against this backdrop is a foreground of worries about trade wars, bringing with it a general atmosphere of market risk aversion, which tends to play against growth-linked currencies such as the Aussie. Australia is after all linked to the trade spat’s two great protagonists, China and America, in numerous intertwined ways.

On top of all this comes political risk. There has been plenty of churn at the top of Australian politics in the last ten years or so. The country has had six Prime Ministers since 2007 and the ruling party’s loss of of a key by-election in Sydney last week suggests that 2018 could bring a seventh.

So, the Australian Dollar remains unlikely to look like a screaming buy this week, for whatever should occur is most unlikely to play against all of the negatives now plaguing it. However, investors will get a look at official domestic consumer prices. Those data come due on Wednesday.

The second quarter’s annualized rise of 2.1% put inflation back within the RBA’s 2-4% target band for the first time since the final quarter of 2016. If it holds up, or even edges ahead then the momentum lower in AUD/USD could be halted, even if it is unlikely to stop for long. After all the RBA’s mandate is to keep price rises within that band ‘over time,’ not merely to get them up there on occasion.

Still, signs of sustainably higher prices may yet give the Aussie a bit of support and, assuming the absence of more left field bad news, it’s a neutral call this week.

Australian Dollar Might Get Some Respite If Inflation Holds Up

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

Other Weekly Fundamental Forecast:

Japanese Yen Forecast - Yen Price May Rise, Look Past BoJ, Eye Vulnerable Stock Markets

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