AUD/USD Fundamental Analysis May 14, 2013 Forecast

Analysis and Recommendation:

The AUD/USD is below parity trading at 0.9978 after the RBA surprised markets and reduced its key lending rate by 25 bps last week. This started the weakness in Aussie which had been trading around 1.02 after coming close to 1.05 the prior month. This morning home loans reported well above forecast but did not have much of an effect on the markets, while the NAB business confidence index tumbled as businesses were worried about the upcoming budget and the recovery in Europe and the affects that the weak JPY will have on prices.

Lackluster data from China, Australia’s main trading partner continues to weigh heavily on the economy. But it is the strength of the US dollar trading at a high not seen since 2008 after a report hit the wires that the Fed had developed a plan to wind down asset purchases in view of strong jobs numbers in the US.

Last week’s positive jobs data helped bump the Aussie back to the 1.02 level after the RBA announcement, but it was unable to combat the strength of the US dollar. This week’s focus will be the upcoming budget. The Australian dollar’s fortunes hinges on official Chinese industrial production and retail sales data for April. Any sign of weakness within Australia’s biggest trading partner could send the Aussie below 99.50 cents, for the first time in 11 months. But, a firm result could bring the local currency above parity.

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.

Economic Data May 13, 2013 actual v. forecast

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD