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AUD/USD Fundamental Forecast – July 25, 2016

By:
Barry Norman
Published: Jul 22, 2016, 03:58 UTC

The AUD/USD saw a big fall to trade at 0.7468 down by 25 points as traders prepare for central bank meetings. With no stimulus from the BoE and the ECB

AUD/USD Fundamental Forecast – July 25, 2016

The AUD/USD saw a big fall to trade at 0.7468 down by 25 points as traders prepare for central bank meetings. With no stimulus from the BoE and the ECB traders moved away from commodity currencies. Earlier in the Asia session, the Reserve Bank of New Zealand signaled an interest-rate cut next month, saying inflation remains stubbornly low and the currency is too strong. “At this stage it seems likely that further policy easing will be required to ensure that future average inflation settles near the middle of the target range,” RBNZ Governor Graeme Wheeler said in a statement. The Australian dollar continues to sink, weighed down by growing bets that the Reserve Bank of Australia (RBA) will cut interest rates in less than two weeks’ time along with ongoing US dollar strength.

With nothing else of note on the calendar, headlines relating to the Bank of Japan’s monetary policy meeting next Friday, and as a consequence USD/JPY, will likely be influential. As is the case on quiet data days, the performance of Chinese stocks, the USD/CNH and crude oil futures may also sway the Aussie.

The Australian dollar has edged lower as traders wait on next week’s quarterly consumer prices data, which could trigger a Reserve Bank rate cut.

“With a near 60 per cent probability priced in for an August Reserve Bank rate cut, there has been little appetite to chase Aussie moves lower,” OANDA Australia and Asia Pacific senior trader Stephen Innes said.

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Upcoming Economic Events that you should be monitoring:

Monday, July 25, 2016

Country Name Volatility Previous
JPY Adjusted Merchandise Trade Balance 2 269.8
JPY Merchandise Trade Balance Total 2 -40.7
JPY Imports (YoY) 2 -13.8
JPY Exports (YoY) 2 -11.3
EUR IFO – Expectations 2 103.1
EUR IFO – Business Climate 2 108.7
EUR IFO – Current Assessment 2 114.5
USD Dallas Fed Manufacturing 2 -18.3

 Government Bond Auctions

Date/Time Country Type

Jul 25 11:30 Germany Eur 1.5bn Jul 2017 Bubill

Jul 25 17:20 Italy Announces details of bond auction

Jul 26 11:10 Italy Holds zero-coupon/BTP€i auction

Jul 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Jul 28 11:10 Italy Holds bond auction

 

 

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