AUD/USD Fundamental Forecast – September 1, 2016

The Australian Dollar posted an inside move on Wednesday and a slightly higher close against the U.S. Dollar on light volume and low volatility. The chart pattern suggests investor indecision and impending volatility. The AUD/USD finished at .7528, up 0.0020 or +0.26%.

Trading was tight as investors continued to digest the hawkish comments from Fed Chair Janet Yellen and Vice Chair Stanley Fischer from last Friday. Yellen said the economy is strengthening, but failed to indicate a rate hike was imminent. Fischer said that two rate hikes were a “possibility”. This comments continued to underpin the U.S. Dollar early Wednesday.

On Tuesday, Aussie plunged against the U.S. Dollar after the Conference Board said its consumer confidence index rose to an 11-month high in August. Other data indicated that U.S. house price growth moderated in June but still remained strong.

Earlier today, the Private Sector Credit report for July came in as expected at 0.4%. In addition, Reserve Bank of Australia Assistant Governor Guy Debelle said that the Forex market suffers “from a lack of trust in its functioning” before giving a speech outlining the Global Code of principles being carried out by the Bank for International Settlements (BIS).

Traders remained focused on the Australian Retail Sales data and China’s Manufacturing PMI report on Thursday. Retail sales are expected to rise 0.3% from 0.1%. China’s Manufacturing PMI report is expected to come in at 49.9, unchanged from the previous month. The Caixin Manufacturing PMI for August is expected to come in at 50.1, down slightly from 50.6. Anything under 50.0 is expected to produce a volatile downside reaction.

In the U.S. on Wednesday, traders will get the opportunity to react to the latest ADP Non-Farm Employment Change report at 1215 GMT. The report is expected to show the economy added 175K private sector jobs in August. Traders should expect volatility after the report. A better-than-expected report will be bullish for the U.S. Dollar and bearish for the Australian Dollar.

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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Thursday, September 1, 2016

Government Bond Auctions

Date/Time Country Type

Aug 31 11:05 Norway Holds bond auction

Aug 31 11:30 Germany Eur 4bn Sep 2018 Schatz

Sep 01 10:30 Spain Holds bond auction

Sep 01 11:30 UK Jul 2022 Gilt

Sep 01 11:50 France Holds bond auction