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AUD/USD Fundamental Forecast – July 27, 2016

By:
Barry Norman
Published: Jul 26, 2016, 03:34 UTC

The AUD/USD added 17 points ahead of a huge amount of local data due in the morning. Traders will be closely monitoring inflation data. The Aussie gained

AUD/USD Fundamental Forecast – July 27, 2016

The AUD/USD added 17 points ahead of a huge amount of local data due in the morning. Traders will be closely monitoring inflation data. The Aussie gained to 0.7487 well within its current trading range. The US dollar gave back a bit of Mondays gains as traders prepare for the FOMC decision. The Fed is seen as unlikely to raise interest rates on Wednesday, though investors will be looking for any signs that the U.S. central bank might be more likely to hike rates in coming months.

Improving economic data has increased expectations that the Fed will raise rates in December, after traders had entirely priced out the possibility of a rate hike this year. Fed fund futures on Monday indicate traders see a 56 percent chance of a rate hike in December, up from 48 percent on Friday.

Any indication that the Fed may hike sooner than that could rattle investors. “I would not expect them to close the door on a September rate hike because it’s data dependent and the data’s been stronger than expected,” Chandler said. “That could inject extra volatility in the markets.”

There are no major economic data released overnight and markets are hanging out for a smorgasbord of major events later in the week, including Australian Q2 CPI on Wednesday. As such, the Australian dollar did next to nothing in overnight trade.

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Upcoming Economic Events that you should be monitoring:

Wednesday, July 27, 2016

Country Name Volatility Previous
AUD Consumer Price Index (QoQ) 3 -0.2
AUD RBA trimmed mean CPI (YoY) 3 1.7
AUD Consumer Price Index (YoY) 3 1.3
AUD RBA trimmed mean CPI (QoQ) 3 0.2
EUR Gfk Consumer Confidence Survey 2 10.1
GBP Gross Domestic Product (YoY) 2 2
GBP Gross Domestic Product (QoQ) 2 0.4
USD Durable Goods Orders 3 -2.2
USD Durable Goods Orders Core 3 -0.3
USD Pending Home Sales (YoY) 2 2.4
USD Pending Home Sales (MoM) 2 -3.7
USD Fed’s Monetary Policy Statement 3
USD Fed Interest Rate Decision 3 0.5

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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