AUD/USD Fundamental Analysis October 21, 2014 Forecast

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Updated: Aug 25, 2015, 02:00 UTC

Analysis and Recommendation: The AUD/USD gained 38 points against a weakening US dollar as traders returned on Monday morning. There was little else to

AUD/USD Fundamental Analysis October 21, 2014 Forecast

Analysis and Recommendation:

The AUD/USD gained 38 points against a weakening US dollar as traders returned on Monday morning. There was little else to look at in the Asian session as traders wait for Chinese GDP numbers. The stimulus package launched late last week by China is also supporting the Aussie and NZD today. The Aussie climbed to trade at 0.8782. China’s central bank is planning to inject up to 200 billion yuan ($US32.8 billion) into about 20 large national and regional banks, according to banking executives briefed on the matter, in another step aimed at spurring the world’s second-largest economy. The central bank is expected to guide the banks to channel credit into areas the government has deemed as important to the economy, such as public housing and private and small businesses

Turmoil in global markets has pushed out expectations for the first interest rate rise from the US Federal Reserve, threatening to hold up the Australian dollar and frustrate the Reserve Bank of Australia’s hopes to start “normalizing” its record low rates. Commonwealth Bank of Australia chief economist Michael Blythe said the uncertainty around global growth had wiped out hawkish interest rate expectations for the US, giving Fed chair Janet Yellen more time to hold rates at zero. This would suppress the US dollar rally.

Inflation data due on Wednesday for the September quarter will be critical in shaping consensus on the outlook for Australian interest rates.

The Reserve Bank has signaled it is considering macro-prudential lending restrictions to stem worrying house price inflation rather than lift its record low 2.5 per cent cash rate, which would risk pushing up the Australian dollar.

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 actual vs. forecast:

Cur.		Event	Actual	Forecast	Previous
	Holiday	Kenya – Mashujaa Day
JPY		BoJ Governor Kuroda

Upcoming Economic Events that you should be monitoring:

Cur.	Imp.	Event	Actual	Forecast	Previous
CNY		Fixed Asset Investment		16.3%	16.5%
CNY		GDP (QoQ) (Q3)		1.8%	2.0%
CNY		GDP (YoY) (Q3)		7.2%	7.5%
CNY		Industrial Production		7.5%	6.9%
USD		Existing Home Sales		5.10M	5.05M
USD		Existing Home Sales		1.0%	-1.8%