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AUD/USD Fundamental Forecast – August 26, 2016

By:
Barry Norman
Updated: Aug 25, 2016, 04:50 UTC

The AUD/USD is up 11 points at 0.7624 remaining rangebound. There is a lack of top tier data until the US session later but that data is expected to have

AUD/USD Fundamental Forecast – August 26, 2016

The AUD/USD is up 11 points at 0.7624 remaining rangebound. There is a lack of top tier data until the US session later but that data is expected to have little effects on the market with the big Jackson Hole speech the focus of the markets. ANZ noted that the markets for key Australian exports iron ore and coal remained among the world’s most oversupplied, which was likely to prevent any sustained rally in the terms of trade. Additionally, the recent strength in the Australian dollar could weigh on economic growth.

“This outlook for both the domestic economy and key commodity sectors means any further appreciation in the Australian dollar is likely to be driven by global liquidity and risk appetite factors, rather than anything fundamental,” ANZ said.

The AUD held on to its gains despite disappointing data yesterday, when Australia’s construction work data dropped more than expected.

Katrina King, head of global liquid strategies at QIC, one of the Australia’s biggest government pension managers has said that at US 77 cents, the Australian dollar looks to be 10% overvalued, when measured by the Reserve Bank of Australia’s in-house economic modelling, reports The Australian.

ABN Amro Bank NV which had a bearish view on the Aussie dollar with a target of 72 cents at the end of the third quarter, has closed their trading recommendation, said Roy Teo, its senior currency strategist in Singapore. They expect the RBA to ease in November and forecast the Aussie to end the year at 74 cents, reports Bloomberg.

A Reuters poll of 55 analysts in early July forecasts the Aussie dollar to reach 72 cents in three months’ time and drop down further to 70 cents in a year.

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Upcoming Economic Events that you should be monitoring:

August 26, 2016

Country Name Volatility Previous
JPY Tokyo CPI ex Food, Energy (YoY) 2 0.3
JPY Tokyo CPI ex Fresh Food (YoY) 2 -0.4
JPY Tokyo Consumer Price Index (YoY) 2 -0.4
JPY National CPI Ex-Fresh Food (YoY) 2 -0.5
JPY National CPI Ex Food, Energy (YoY) 2 0.4
JPY National Consumer Price Index 2 -0.4
EUR Gfk Consumer Confidence Survey 2 10
GBP GDP (YoY) 2 2.2
GBP GDP (QoQ) 2 0.6
USD GDP Annualized 2 1.2
USD GDP Price Index 2 2.2
USD Personal Consumption (QoQ) 2 1.9
USD Core Personal Consumption (QoQ) 2 1.7
USD Markit PMI Composite 2
USD Baker Hughes US Oil Rig Count 2

Government Bond Auctions

Date Time Country Auction

Aug 24 10:03 Sweden Holds bond auction

Aug 24 10:30 Germany Eur 4bn 0% Oct 2021 Bobl

Aug 24 18:00 US Holds 2yr FRN auction & 5yr note auction

Aug 25 18:00 US Holds 7yr note auction

Aug 26 10:10 Italy Holds zero coupon

 

 

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