AUD/USD Fundamental Forecast – May 6, 2016

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Published: May 5, 2016, 04:14 UTC

The AUD/USD gained 35 points to 0.7491 after taking a dive after the RBA surprised markets reducing its prime lending rate by 25 bps on Tuesday.

AUD/USD Fundamental Forecast – May 6, 2016

The AUD/USD gained 35 points to 0.7491 after taking a dive after the RBA surprised markets reducing its prime lending rate by 25 bps on Tuesday. Lackluster Chinese data this week should have weighed on the Aussie but talks of stimulus and much better domestic trade and retail data helped the currency recover. “China is fueling the negative sentiment,” said the chief market strategist at Unibank Inc., the largest Philippine bank by assets. The weakness in manufacturing “reinforces expectations that China remains fragile and that it needs more stimulus to sustain economic improvement,” he said.

While Chinese data have yet to suggest a solid economic recovery, U.S. manufacturing figures issued on Monday also showed slowing growth for that sector. Interest-rate futures are pricing in just 12% odds that the Federal Reserve will raise borrowing costs by its next meeting in June and 60% by December. That compares with 24% and 62% respectively, a month ago. A measure tracking the dollar against 10 peers posted a fourth day of losses on Tuesday to reach the lowest level in a year.

The dollar’s slump this year has allowed the People’s Bank of China to weaken the yuan against a basket of currencies, while keeping it steady against its U.S. counterpart. This strategy is being undermined by the greenback’s biggest two-day jump since November, fueled by signals the Federal Reserve may raise interest rates next month.

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.

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Friday, May 6, 2016

Cur.	Event	Actual	Forecast	Previous
USD	FOMC Member Bullard Speaks
USD	FOMC Member Kaplan Speaks
USD	FOMC Member Lockhart Speaks
USD	FOMC Member Williams Speaks
AUD	RBA Monetary Policy Statement
USD	Average Hourly Earnings (MoM) (Apr)		0.3%	0.3%
USD	Nonfarm Payrolls (Apr)		202K	215K
USD	Participation Rate (Apr)			63.0%
USD	Private Nonfarm Payrolls (Apr)		193K	195K
USD	Unemployment Rate (Apr)		5.0%	5.0%
USD	Baker Hughes U.S. Rig Count			332