Australian Dollar Keeps Rising After HIA Home Sales Gain
- Australian new home sales gained in April, recovering a little of the previous month’s sharp fall
- The Australian Dollar had been rising before these numbers
- But they gave bulls another reason to keep buying
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The Australian Dollar wasn’t moved much by some better news for home sales from its home country Friday, but its modest recovery from the previous session’s falls went on.
The Housing Industry Association said that April saw a 0.8% on-month rise in new homes sold. That was a welcome bounce from the 1.1% fall seen in March. Investors’ overall view of the Australian housing market had already been lifted somewhat this week by news that building approvals beat consensus in April. This was an important steadier for Aussie-watchers as an earlier release concerning March building permits had been extremely weak.
The Aussie was hit hard Thursday by news of a shock contraction in Chinese private sector manufacturing, the first for twelve months. It had been creeping back Friday and continued to so after the housing data.
However, the key Australian Official Cash Rate remains at 1.50% record lows and, while investors think it may go no lower, no rises are forecast by futures markets for at least 18 months. Next week’s monetary policy meeting is thought all-but certain to end with no change.
The Reserve Bank of Australia is keeping a close eye on Australia’s housing market but is also very worried about rising global uncertainties, with the chance of a China slowdown prominent among those.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.