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
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
More View more
Real Time News
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh88nOv https://t.co/RMxpXvpa61
  • RT @arwaib: BREAKING: Jets flying over Baghdad right now after reports of expected #US response to earlier rocket attacks that slammed in e…
  • RT @ForexLive: China confirmed #coronavirus cases: Jan 17: 41 Jan 19: 62 Jan 20: 201 Jan 21: 291 Jan 22: 440 Jan…
  • #JPY, #USD #gold up with bond futures, #crudeoil down with S&P 500 stock futures as #coronarovirus fears grip markets at weekly trading open. Backstory here - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/01/26/Japanese-Yen-US-Dollar-May-Gap-Higher-as-Week-Starts-on-Virus-Fears.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr (via @ddubrovskyFX) https://t.co/bq96FHKBNs
  • RT @conorsen: @selling_theta @LJKawa https://t.co/vVfmLgHd9b
  • RT @iv_technicals: So you thought it was all contained, right?! Mhm. Cool stuff. https://t.co/PShm600IPS
  • RT @globaltimesnews: #Hubei Province reported 371 new cases of #WuhanCoronavirus and 24 new deaths on Jan 26 local time; total infection ca…
  • What is market volatility and what does a market event volatility look like? Find out from @PaulRobinsonFX here: https://t.co/vg7w10la3j https://t.co/QpD4VP4vDc
  • The last time the $USDJPY suffered this large of a bearish gap in a bearish slide (this one still nascent), was back in May: https://t.co/hTxfyVFiox
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST on DailyFX! - https://t.co/RgnsklZ2Gl
Australian Dollar Faces Global Risks: US-China Trade, UK Vote, Fed

Australian Dollar Faces Global Risks: US-China Trade, UK Vote, Fed

2019-12-07 02:00:00
David Cottle, Analyst
AUDUSD 2-Hour Chart

Fundamental Australian Dollar Forecast: Neutral

  • The Australian Dollar has made notable gains after local interest rate decisions and growth data
  • Investors remain convinced that more stimulus will be needed, however
  • This prognosis will weigh on the currency, but market minds may be elsewhere this week

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 lacks the sort of major domestic economic talking points which characterized the past busy week, which will probably leave global risk appetite with a bigger say over where it goes.

The Aussie jumped notably on December 2 when the Reserve Bank of Australia left the key Official Cash Rate on hold at its 0.75% record low. In some ways this was an odd reaction to a result well priced-in to markets before the fact. Still, judging by its commentary the RBA appears content for now to gauge the effects of past rate cuts and, perhaps, hope that holiday-period spending provides some stimulus of its own.

AUD/USD’s gains snapped the downtrend which had previously been in place since early November.

Daily AUD/USD Price Chart

Daily AUDUSD Price Chart

The currency was taken still higher when official third-quarter Gross Domestic Product data came in more or less as expected, a relief in the end as investors had been a little nervous. Still, while growth may be holding up, just, the markets aren’t entirely convinced that this happy state of affairs will endure.

Australian ten-year bond yields saw some big falls in the aftermath of the GDP data, suggesting that market, at least, thinks more monetary loosening will be needed. Indeed, a small but growing list of major banks is prepared to forecast that this will need to go beyond lower interest rates and into the outer reaches of Quantitative Easing (QE), perhaps by late next year.

In his latest speech on the subject RBA Governor Philip Lowe for his part doubted that either QE or negative interest rates seen elsewhere would be needed, although of course he reserves all right of action in pursuit of his mandate. Markets will therefore look eagerly to his next, due in Sydney on Tuesday, for further clues.

Also coming up are snapshots of business and consumer confidence, along with Chinese trade and inflation data, both of which can move the Aussie.

However, in the absence of first-tier domestic data drivers the currency is all too likely to be buffeted by international risk events. The twists of the US-China trade story will probably be chief among these, as will the Federal Reserve’s last policy decision of the year. That’s coming up on Thursday. The Fed is expected to leave rates alone and maintain its data-watching brief. The United Kingdom’s general election will also loom large at week’s end.

The Australian Dollar has been quite sensitive to Brexit news and, with this election effectively yet another public vote on how to move that story on, the currency probably stands to gain if the incumbent Conservative government is returned with a majority.

However, given the Aussie’s lack of monetary policy support, and the unpredictability of trade-deal headlines, it’s still a neutral call this week.

Australian Dollar 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.


News & Analysis at your fingertips.