AUD/USD Forecast Dec. 22, 2011, Fundamental Analysis

The AUD/USD pair soared significantly with the beginning of Wednesday’s session, as risk aversion retreated which opened the way for higher-yielding currencies to increase ahead of the ECB loans on eased jitters yet the volatility returned into the session after the auction gave mixed outlook for the financial system status in the euro area.

The US dollar dropped against other major currencies, where the risk appetite encouraged investors to increase demand for risky assets such as the Aussie. Yet with the ECB reporting a high 489 billion euro loans the market was jittered again that banks might not be that strong which fueled more fears and choppy trading.

The U.S. economy will release the final GDP reading for the third quarter at 13:30 GMT, the annualized Gross Domestic Product for the third quarter is expected to remain unrevised at 2.0%.

The Personal Consumption for the third quarter is also expected steady at 2.3% as well as the Core Personal Consumption Expenditure to hold at 2.0%.

The U.S. economy will also issue its weekly initial claims, where the number of people filing for first-time claims for the state unemployment insurance dropped to 366 thousand last week.

At 14:55 GMT, the United States will issue the University of Michigan Confidence for December, where the previous reading was 67.7 and it’s expected to rise to 68.2.

The U.S. leading index for November will be released at 15:00 GMT and expected to slow to 0.3% from 0.9%.