AUD/USD Weekly Fundamental Analysis – February 8-12, 2016 -Forecast

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Published: Feb 6, 2016, 06:05 UTC

Weekly Analysis and Recommendation: The AUD/USD ended the week at 0.7068 declining 0.24% for the week. The Australian Dollar retreated after hitting a

AUD/USD Weekly Fundamental Analysis – February 8-12, 2016 -Forecast

Weekly Analysis and Recommendation:

The AUD/USD ended the week at 0.7068 declining 0.24% for the week. The Australian Dollar retreated after hitting a monthly high against its US counterpart last week. The initial rally played out against a backdrop pre-positioning ahead of the release of January’s US employment data, which markets expected to confirm a dovish shift in Fed policy outlook pricing out further rate hikes in 2016. When the figures actually crossed the wires however, traders were forced to rethink this scenario.

While the increase in nonfarm payrolls trailed forecasts and the previous month’s outsized advance was revised a bit lower, the unemployment rate ticked down unexpectedly even as the participation rate advanced. There was good news to be had on the wages front as well: average hourly earnings grew at a brisk pace of 2.5 percent year-on-year and December’s print was revised up to a multi-year high of 2.7 percent. Economists were projecting a reading of 2.2 percent ahead of the release.

The markets appeared to be clear-cut in their response. Fed Funds futures shifted to reflect recovery in the priced-in policy outlook, front-end bond yields rallied and the US Dollar moved broadly higher against its major counterparts. The benchmark S&P 500 stock index – a proxy for market-wide risk appetite – declined in tandem to reflect fears of on-coming tightening on the horizon.

Looking ahead, a lull in high-profile event risk on the domestic front will keep speculation about the likely path of US monetary policy at the forefront. The spotlight now falls to Fed Chair Janet Yellen, who will take turns delivering her semi-annual testimony to the Finance Committees of both chambers of the US Congress.

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.

Major Economic Events for the week:


Date	Currency		Forecast
Feb 7	JPY	Current Account	1.59T
Feb 8	CAD	Building Permits m/m
	USD	Mortgage Delinquencies
Feb 9	AUD	NAB Business Confidence
	GBP	Trade Balance	-10.4B
	USD	JOLTS Job Openings	5.54M
	AUD	Westpac Consumer Sentiment
Feb 10	GBP	Manufacturing Production m/m	0.0%
Feb 11	CAD	NHPI m/m	0.3%
	USD	Unemployment Claims	287K
Feb 12	AUD	Home Loans m/m	2.9%
	EUR	German Prelim GDP q/q	0.3%
	EUR	Flash GDP q/q	0.3%
	USD	Core Retail Sales m/m	0.0%
	USD	Retail Sales m/m	0.1%
	USD	Import Prices m/m	-1.4%
	USD	UoM Consumer Sentiment	92.6
Feb 13