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
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
Wall Street
Mixed
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
Mixed
More View more
Real Time News
  • The British Pound may fall if EU and UK negotiators fail to reach a consensus as the December 31 deadline nears. The third presidential debate is on deck, how might markets react? Find out from @ZabelinDimitri here:https://t.co/kDSYzBDA3t https://t.co/7bZVhygGzW
  • 6 out of 9 Dow Jones sectors closed in the green, with 73% of the index’s constituents ending higher on Thursday. Energy (+3.57%), financials (+1.99%) and industrials (+1.93%) were leading, whereas information technology (-0.52%) and consumer staples -0.49%) were lagging. https://t.co/ClzN5LtWLG
  • The Dow Jones, S&P 500 and AUD/USD could be at risk of extending losses as retail investors increase upside exposure. What are key technical levels to watch for? Find out from @ddubrovskyFX here:https://t.co/ivQmFUTGdU https://t.co/aTLUtE6OaE
  • 🇯🇵 Inflation Rate Ex-Food and Energy YoY (SEP) Actual: 0.0% Previous: -0.1% https://www.dailyfx.com/economic-calendar#2020-10-22
  • 🇯🇵 Inflation Rate YoY (SEP) Actual: 0.0% Previous: 0.2% https://www.dailyfx.com/economic-calendar#2020-10-22
  • Heading into the final US Presidential debate with a market that seems to be distinctly focused on the November 3rd election - or its implications including a US stimulus deal potential - two-thirds of people in my poll don't think it will factor into heavy Friday volatility: https://t.co/dArCxCWwAn
  • 🇯🇵 Core Inflation Rate YoY (SEP) Actual: -0.3% Expected: -0.4% Previous: -0.4% https://www.dailyfx.com/economic-calendar#2020-10-22
  • Heads Up:🇯🇵 Inflation Rate Ex-Food and Energy YoY (SEP) due at 23:30 GMT (15min) Previous: -0.1% https://www.dailyfx.com/economic-calendar#2020-10-22
  • Heads Up:🇯🇵 Core Inflation Rate YoY (SEP) due at 23:30 GMT (15min) Expected: -0.4% Previous: -0.4% https://www.dailyfx.com/economic-calendar#2020-10-22
  • Heads Up:🇯🇵 Inflation Rate YoY (SEP) due at 23:30 GMT (15min) Previous: 0.2% https://www.dailyfx.com/economic-calendar#2020-10-22
Australian Dollar Market Will Be Fed Focused, But Watch Aussie CPI

Australian Dollar Market Will Be Fed Focused, But Watch Aussie CPI

2019-10-26 01:00:00
David Cottle, Analyst
Share:
AUDUSD 2-Hour Price Chart

Fundamental Australian Dollar Forecast: Bullish

  • The Australian Dollar has risen into the coming week’s US interest rate decision
  • It has held those gains despite a lack of clarity on either US/China trade or Brexit
  • Assuming the Fed delivers they should hold a little longer yet

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 will like all other tradeable assets be focused on the United States in the coming week. The US Federal Reserve will give its next monetary policy decision on October 31.

Like most pro-cyclical units, the Aussie has risen into this event. With the Fed long seen as all-but certain to cut interest rates there’s reason in that. The currency also got some support this month from hopes of progress in both the US/China trade story and the tortured saga of Brexit.

However, it has since become clear that neither tale is anywhere near resolution. Nevertheless AUD/USD remains very close to its October highs suggesting that the prognosis for lower US interest rates was always its primary driver.

AUD/USD Daily Price Chart

Daily AUDUSD Price Chart

It may be primary, but it won’t be alone. Wednesday will bring markets their first look at official Australian consumer price inflation data for the third quarter. The annualized growth rate is expected to remain subdued at 1.6%, well below the 2% lower band of the Reserve Bank of Australia’s target area.

Aussie Inflation Should Remain Weak, But Central Bankers Expect This

However, the RBA has expected this outcome for quite some time and, should it be delivered, it’s doubtful that expectations of Australian interest rate policy will change much. Clearly a significant undershoot would increase rate-cut bets and, in all probability, weaken the currency, so be on careful watch for that.

RBA Governor Philip Lowe is due to speak on Tuesday. This will only be a day before that crucial CPI release and, as such, he may not give much away. Markets may be tempted to interpret anything he says as a steer on the data, and central bankers tend to avoid being accused of that if they can.

Still, all up this week is likely to be at least comforting for risk appetite, assuming the Fed plays ball and doesn’t sound too opposed to further monetary largesse. If Australian inflation doesn’t collapse (and it’s not expected to) the Aussie should at least be supported by this.

Headlines around trade or Brexit will retain the potential to derail optimistic market bets, but they are very hard to predict. On the basis of what we can know, it’s a cautiously bullish call.

The longer-term backdrop for AUD/USD, at least, remains quite bearish, however, with the long downtrend from late 2018 under no serious threat.

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!

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

DISCLOSURES