AUD/USD Fundamental Analysis – August 26, 2015 – Forecast

Analysis and Recommendation:

The AUD/USD recovered in the morning session as traders bought up the cheap commodity. Markets seemed to breathe a sigh of relief after Monday’s rout. The Aussie gained 57 points to trade at 0.7213. U.S. stocks plummeted Monday, but trimmed their losses in afternoon trading. Analysts said an 8.5% drop in the Shanghai Composite Index triggered spillover selling in Europe and the U.S.

In something of a mini ‘flash crash’ the local currency dived US2c in the space of 10 minutes, before rebounding back near levels seen at the end of local trade on Monday. The Australian dollar has been hit hard over the past week as commodities retreat on concerns around the strength of the Chinese economy. The Aussie dollar traded down to a low of 0.7058 last night when the Dow was off 1,000 points and fear in global markets was at its nadir.

Of course as the Dow rallied a little, it closed down just 588 points, fear receded a bit and the Aussie has climbed back to 0.7169 this morning.

Market fear has certainly shot up recently says Ray Attrill, the NAB’s co-head of global currency strategy. In a note this morning he highlighted that the worries in US stock markets as measured by the “‘fear gauge’ soubriquet commonly applied to the VIX.

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.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, August 26, 2015

Government Bond Auctions

Date Time Country

Aug 25 00:00 UK Announces details of Jan 2021 gilt

Aug 25 17:30 Italy Announces details of BTP/CCTeu on 28 Aug

Aug 25 19:00 US Holds 2-year note auction

Aug 26 11:10 Italy Eur 3bn 0.15% Aug 2017 CTZ

Aug 26 19:00 US Holds 2-year FRN note auction

Aug 26 12:05 Norway Holds bond auction

Aug 26 19:00 US Holds 5-year note auction

Aug 26 19:00 US Holds 2-year FRN auction

Aug 27 11:03 Sweden Sek 0.5bn 0.125% I/L Jun 2019, Sek 0.5bn 1% Jun 2025 bonds

Aug 27 19:00 US Holds 7-year note auction

Aug 28 11:10 Italy Auctions BTPs/CCTeus

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep