AUD/USD Daily Fundamental Analysis for July 26, 2011

The Australian dollar witnessed some inclines against the American dollar as the Australian economy reported that producer price index has improved in the second quarter, supporting the Aussie to gain, adding that the RBA will increase the rates during the next meeting.

All eyes focus on the Australian data that will release today, while Australia is to issue its CPI reading for the second quarter which has a strong impact on the Aussie’s movement against the major currencies, from these data the RBA will decide if the economy needs to increase the rates this quarter or leave the rates unchanged steady at 4.75%, while the Bank aims to keep the inflation rates between 2% and 3%.

Moreover, we can see that Aussie is to move in a downside movement amid the fears that dominate the market’s movement and the Asian stock slump, and the US equity futures slid, damping the demand on the Aussie.

However, in light of the recent comments by the Reserve Bank of Australia, it seems as though the central bank will keep the rates steady because of the Bank wants to wait and see approach throughout the next period.

On Tuesday, at 00.00 GMT, Australia is to introduce its conference leading index for the month of May, while the April’s reading increased 0.1%.

At 14:00 GMT, the American economy will release the consumer confidence for July, which had a previous reading of 58.5 and it’s expected to come at 57.9. The Richmond Fed Manufacturing index for July will be published at 14:00 GMT, where it is expected to come at 5 from the previous reading of 3.

The U.S. new home sales for June will be issued at 14:00 GMT, where the previous reading dropped by 2.10% at 319 thousand and the expectations refer to 320 thousand with a rise of 0.3%.