AUD/USD Fundamental Forecast – February 10, 2016

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Published: Feb 9, 2016, 05:08 UTC

Analysis and Recommendation: The AUD/USD declined 51 points to trade at 0.7037 as traders dumped assets as oil prices tumbled again on Monday. Aussie

AUD/USD Fundamental Forecast – February 10, 2016

Analysis and Recommendation:

The AUD/USD declined 51 points to trade at 0.7037 as traders dumped assets as oil prices tumbled again on Monday. Aussie business confidence reported at expectations but lower than last month. the Aussie has been dragged down by Oil prices falling just over 3.0% overnight, now under US$30 a barrel. There is also speculation that the Fed may ultimately have to join other central banks and adopt negative rates. The market will focus on Yellen’s testimony to Congress on Wednesday-Thursday, when Yellen is expected to sound a more cautious tone. Hopes of a coordinated supply cut from OPEC and non-OPEC members continue to fade. Meetings led by Venezuela have failed to garner any interest, with Saudi Arabia the latest to baulk. Interest is now turning to the US, with the market expected to scour for any potential changes in expectations of US supply in EIA’s short-term energy outlook report.

There is a question over China’s ability to control its currency, even though the fall in FX reserves released over the weekend was smaller than expected. Commonwealth Bank of Australia chief currency strategist Richard Grace says weaker global equity markets, particularly in Asia, have been pushing the local unit down.

“I don’t see too much upside to it, we expect this to continue,” he told AAP.

He said while the Australian dollar has been falling, currencies of countries with large current account surpluses, like the yen, have been rising against the greenback. “Australia doesn’t have a current surplus,” Mr Grace added.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
	China – Lunar New Year
GBP	BRC Retail Sales Monitor (YoY) (Jan)	2.6%	0.4%	0.1%
AUD	NAB Business Confidence (Jan)	2	2	3

Upcoming Economic Events that you should be monitoring:

Wednesday, February 10, 2016

Cur.	Event	Actual	Forecast	Previous
	China – Lunar New Year
USD	API Weekly Crude Oil Stock			3.837M
NZD	Electronic Card Retail Sales (MoM)		0.3%	-0.2%
AUD	Westpac Consumer Sentiment		-1.0%	-3.5%
AUD	HIA New Home Sales (MoM) (Dec)			-2.7%
GBP	Industrial Production (MoM) (Dec)		-0.1%	-0.7%
GBP	Manufacturing Production (MoM)		0.1%	-0.4%
GBP	NIESR GDP Estimate			0.6%
USD	Fed Chair Yellen Testifies
USD	Crude Oil Inventories		3.933M	7.792M
USD	FOMC Member Williams Speaks
USD	Federal Budget Balance (Jan)		45.0B	-14.0B