AUD/USD Monthly Fundamental Forecast August 2012

Get Forex buy/sell signals directly to your email and by SMS.
To learn more click here

Outlook and Recommendation

The AUD/USD  -traded as high as 1.0538 in July closing the month at 1.0482. AUD has rallied a full 9% since its year-to-date low of 0.9582 on June 1st. In tandem with this shift, the CFTC reports that the net AUD position has shifted from a net short to a net long of US$2.7 billion (as of July 24th); while the option’s market has positioned for AUD upside. The combination of risk aversion, RBA policy and the outlook for China are the most significant near-term drivers for AUD. We expect it to be a relatively volatile ride and hold a Q3 2012 forecast of 1.02.         

Highest: 1.0538

Lowest: 1.0101

Difference: 0.0437

Average: 1.0302

Change %: 2.40

On the domestic front, the Australian economy has shown some resilience in recent months. Looking forward, growth prospects remain linked to developments in Asian emerging-market growth dynamics and global commodity markets. Building approvals posted an unexpected gain (10.2% on a yearly basis) for a second straight month in June after more than a year of declining activity in the residential construction sector. Business credit has also picked up in the recent months, buoyed by recent interest rate cuts by the central bank and the continued investment drive in the mining sector. Meanwhile, inflation fell again in the three months to June, sliding to 1.2% y/y from 1.6% in the first quarter, and marking the slowest pace since the second quarter of 1999.

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Central Bank Name: Reserve Bank of Australia

Date of next meeting or last meeting: Aug 07

Current Rate: 3.50 %

Statement highlights of last meeting: At its latest meeting on July 5th 2012, the Board decided to leave the cash rate unchanged at 3.50 per cent. Growth in the world economy picked up in the early months of 2012, having slowed in the second half of 2011. But more recent indicators continue to suggest weakening in Europe and a slower pace of growth in China. Conditions in other parts of Asia have recovered from the effects of last year’s natural disasters, but the ongoing trend is unclear and could be dampened by the effects of slower growth outside the region. The United States continues to grow at a modest pace. Commodity prices have declined, which is helping to reduce inflation and providing scope for some countries to ease macroeconomic policies. Australia’s terms of trade have peaked, though they remain historically high.

 Economic events for the month of August affecting AUD, JPY and NZD

Date

Time

Currency

Event 

Forecast

Previous

Aug 2

1:30

AUD

Retail Sales m/m

0.6%

0.5%

 

1:30

AUD

Trade Balance

-0.38B

-0.29B

Aug 7

4:30

AUD

Cash Rate

3.50%

3.50%

 

4:30

AUD

RBA Rate Statement

   
 

23:50

JPY

Current Account

 

0.28T

Aug 8

22:45

NZD

Employment Change q/q

 

0.4%

 

22:45

NZD

Unemployment Rate

 

6.7%

Aug 9

1:30

AUD

Employment Change

 

-27.0K

 

1:30

AUD

Unemployment Rate

 

5.2%

Aug 10

1:30

AUD

RBA Monetary Policy Statement

   

Aug 13

22:45

NZD

Core Retail Sales q/q

   

Aug 15

3:00

NZD

Inflation Expectations q/q

   
 

22:45

NZD

PPI Input q/q

   

Aug 21

1:30

AUD

Monetary Policy Meeting Minutes

   

Aug 30

1:00

NZD

NBNZ Business Confidence

   
 

1:30

AUD

Private Capital Expenditure q/q

   
Want to read more articles like this one?
Enter your e-mail address and read FX Empire content directly from your inbox.
 
We value your privacy. Your e-mail address will not be shared.
About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

  View all of FX Empire Analyst - Barry Norman's Articles    
Share Your Thoughts: Post a Comment


Your email address will not be published.


include_once( __DIR__ . "/request_context.php");