AUD/USD Fundamental Analysis – August 11, 2015 – Forecast

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Updated: Aug 10, 2015, 04:47 UTC

Analysis and Recommendation: The AUD/USD tumbled 23 points to 0.7395 as markets responded to a significant drop in Chinese exports as the trade balance

AUD/USD Fundamental Analysis – August 11, 2015 - Forecast

Analysis and Recommendation:

The AUD/USD tumbled 23 points to 0.7395 as markets responded to a significant drop in Chinese exports as the trade balance crashed. Exports and factory gate prices collapse in July, suggesting government will launch fresh stimulus measures to support the world’s second largest economy.

China’s producer price index (PPI) fell 5.4pc in the year to July, according to the National Statistics Bureau. This compares with expectations for a 5pc decline and represents the steepest fall since October 2009.

Persistent weakness in commodity prices and soft demand in the world’s second largest economy mean factory gate prices have suffered 41 consecutive months of decline.

A 34 per cent fall in the value of the Aussie dollar to a six-year low of about 72 US cents has done little to revive exports, which now cost less for international buyers. Australia posted its widest-ever trade deficit in April. Analysts predict four-fifths of the nation’s biggest listed exporters will report shrinking revenues this year, data compiled by Bloomberg show.

“To get the levels of growth Australia needs you have to have exports,” said Annette Beacher, head of Asia-Pacific research at TD Securities Inc. in Singapore. “Non-mining business investment isn’t coming to the party and monetary policy isn’t really sparking. Hopefully the currency at 72 cents, 73 cents will make a difference.”

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 up to the data analysis and information in our weekly reports.

This weekend and today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
CNY	Exports (YoY) (Jul)	-8.3%	-1.0%	2.8%
CNY	Imports (YoY) (Jul)	-8.1%	-8.0%	-6.1%
CNY	Trade Balance (Jul)	43.03B	53.25B	46.54B
CNY	CPI (MoM) (Jul)	0.3%	0.3%	0.0%
CNY	CPI (YoY) (Jul)	1.6%	1.5%	1.4%
CNY	PPI (YoY) (Jul)	-5.4%	-5.0%	-4.8%
JPY	Adjusted Current Account	1.30T	1.41T	1.64T
JPY	Current Account n.s.a. (Jun)	0.559T	0.774T	1.881T
JPY	BoJ Monthly Report

Upcoming Economic Events that you should be monitoring:

Tuesday, August 11, 2015

Cur.	Event	Actual	Forecast	Previous
AUD	NAB Business Confidence (Jul)			10
EUR	German ZEW Current Conditions		64.4	63.9
EUR	German ZEW Economic Sentiment		32.0	29.7
CAD	Housing Starts (Jul)		195.0K	202.8K
USD	Nonfarm Productivity (QoQ) (Q2)		1.6%	-3.1%
USD	Unit Labor Costs (QoQ) (Q2)		0.2%	6.7%
USD	API Weekly Crude Oil Stock			-2.400M