AUD/USD Fundamental Analysis October 4, 2012 Forecast

Get Forex buy/sell signals directly to your email and by SMS.
To learn more click here

Analysis and Recommendation:

The AUD/USD  continues its tumble in today’s session as Glenn Stevens and the RBA surprised markets by reducing the key lending rate by 25bps yesterday. Markets were expecting the RBA to hold but they did as they usually do, surprise. Also today, there was a slew of disappointing eco data released in OZ showing a widening trade balance, along with a continued decline in new home sales and a lower Services Index.

This combined with a drop in Chinese Non manufacturing PMI weighed heavily on the Aussie.

The US dollar was also strengthened on positive auto data and over market sentiment.

The RBA’s statement suggested that the decision was based on several factors:1) the outlook for growth in the world economy has softened; 2) growth in China has slowed and uncertainty is high; 3) commodity prices are lower; 4) the Australian terms of trade has declined and is likely to decline further; 5) the peak in resource investment is to occur next year and at a lower level than previously expected and 6) a higher than expected AUD. Accordingly monetary policy should be a “little” more accommodative. The statement does not shift the stance to decidedly dovish, leaving open the question as to whether the RBA will cut rates again at either its November 6th or December 4th meetings.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data October 3, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

 

Previous

 

 

Oct. 03

 

GBP

 

 

BRC Shop Price Index (YoY) 

1.00%

 

 

1.10% 

 

 

 

 

AUD

 

 

AIG Services Index 

41.9

 

 

42.4 

 

 

 

 

AUD

 

 

HIA New Home Sales (MoM) 

-5.3%

 

 

-5.6% 

 

 

 

 

CNY

 

 

Chinese Non-Manufacturing PMI 

53.70

 

 

56.30 

 

 

 

 

AUD

 

 

Trade Balance 

-2.03B

 

 

-1.53B 

  

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Date

Time

Currency

Event

Forecast

Previous

Oct. 04

02:30

AUD

Building Approvals (MoM) 

4.7% 

-17.3% 

 

02:30

AUD

Retail Sales (MoM) 

0.4% 

-0.8% 

 

13:30

USD

Initial Jobless Claims 

370K 

359K 

 

13:30

USD

Continuing Jobless Claims 

3271K 

3271K 

 Oct. 05

13:30

USD

Average Hourly Earnings (MoM) 

0.2% 

0.0% 

 

13:30

USD

Nonfarm Payrolls 

110K 

96K 

 

13:30

USD

Average Weekly Hours 

34.4 

34.4 

 

13:30

USD

Private Nonfarm Payrolls 

125K 

103K 

Government Bond Auction

Date Time Country   

Oct 04 08:30 Spain 

Oct 04 08:50 France 

Oct 04 15:00 US 

Oct 05 15:30 Italy 

Want to read more articles like this one?
Enter your e-mail address and read FX Empire content directly from your inbox.
 
We value your privacy. Your e-mail address will not be shared.
About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

  View all of FX Empire Analyst - Barry Norman's Articles    
Share Your Thoughts: Post a Comment


Your email address will not be published.